THE HAGUE – The Dutch Council of State has raised legal questions about the Netherlands’ decision to give Curaçao, Aruba, Sint Maarten and the Caribbean Netherlands preferential treatment under the proposed new aviation tax system.
The questions center on whether destinations located at roughly the same distance from Amsterdam can legally be taxed differently simply because they have different constitutional relationships with European countries.
The issue emerged during the Council of State’s review of the proposed Flight Tax Differentiation Act, which is intended to introduce three distance-based aviation tax rates from 2027.
The government proposes placing the Caribbean parts of the Kingdom in the lowest €29.40 category despite their distance from Amsterdam. Other Caribbean islands at approximately the same distance could face the highest rate of €70.86.
The Council of State specifically highlighted the striking differences that could arise between neighboring Caribbean destinations.
Under the proposal, Sint Maarten would be placed in the lowest category, while Martinique and Saint Barthélemy would fall into the highest category, even though their capitals are located at almost the same distance from Amsterdam.
The differences stem from their legal status.
Sint Maarten is a country within the Kingdom of the Netherlands and is classified in European law as an Overseas Country and Territory. Martinique is an outermost region of the European Union, while Saint Barthélemy is an Overseas Country and Territory associated with France.
The Council questioned whether the different treatment of overseas territories had been established objectively and whether resulting differences in the treatment of EU citizens, European Economic Area citizens and airlines could be legally justified.
It also raised the possibility that the favorable treatment of the Dutch Caribbean could provide an advantage to airlines operating flights to the islands, potentially bringing European state-aid rules into consideration.
The Dutch government rejected the suggestion that the arrangement constitutes unlawful discrimination.
According to the Cabinet, the exception for Curaçao and the other Dutch Caribbean islands is based on objective considerations, including their constitutional position and the substantial economic consequences that a higher tax could have for the islands.
The government also argues that the tax applies equally to all airlines operating from Dutch airports to the destinations concerned, regardless of nationality, ownership or business model. It therefore concludes that the arrangement does not constitute prohibited state aid.
Following the Council of State’s advice, the government expanded the explanatory memorandum accompanying the bill to address the European-law questions.
The legislation still has to pass through the Dutch parliamentary process before the differentiated rates can take effect.