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Thursday, September 28, 2023

Amsterdam's Tax Increase for Tourists and Cruise Passengers: Balancing Tourism and Local Needs

Amsterdam, the picturesque capital of the Netherlands, is known for its iconic canals, historic architecture, and vibrant culture. It has long been a magnet for tourists, drawing millions of visitors each year. However, as the city grapples with the challenges of accommodating this influx of tourists, it is embarking on a significant tax increase targeting tourists and cruise ship passengers. The aim is to bolster the city's budget for essential initiatives, including additional shelter accommodations, poverty measures, and healthcare support, among other vital services. In this blog post, we'll explore the details of this tax increase and its implications for both tourists and the city's residents.

Shifting the Burden

Hester van Buren, the city's finance chief, expressed the city's commitment to sparing its residents from higher costs while shifting the burden towards visitors. The core idea behind this tax increase is to ensure that tourists, who benefit from the city's amenities, contribute more to support the infrastructure and services they enjoy during their stay.

Tourist Tax Rate Increase

One of the most significant changes is the increase in the tourist tax rate. Previously, tourists were charged 7 percent of the room charge plus a 3 euro per person per night fee. Under the new structure, a flat rate of 12.5 percent will be calculated over the room fee. To put this into perspective, let's consider a scenario where two individuals stay in a 200 euro per night room. Their tax liability will increase from 20 euros to 25 euros, representing a 25 percent tax hike.

Cruise Ship Passenger Fees

Cruise ship passengers arriving in Amsterdam will also experience a notable increase in fees. Each passenger will now pay 11 euros per person—a nearly 38 percent rise from the previous charge of 8 euros. This increase aims to ensure that the cruise industry, which brings thousands of visitors to Amsterdam's shores, contributes more significantly to the city's revenue.

Day Tourist Tax

The City of Amsterdam has introduced a Day Tourist Tax for transit sea cruise and river cruise passengers docking within the city's municipal boundaries. In 2019, the city increased the daily tax for cruise visitors to 8 euros per person, applicable to individuals aged 2 and above. Importantly, crew members remain exempt from this tax.

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Learning from Others

Hester van Buren's efforts to address the challenges posed by tourism in Amsterdam are not unique. She has been in dialogue with other cities facing similar issues, such as Venice and Barcelona. As she noted, "We also have to deal with day trippers. Of course, you can’t put up turnstiles so no-one can get into the city, but we are going to look at ways of making day visitors pay some sort of city tax."

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Amsterdam's decision to increase taxes on tourists and cruise ship passengers is a bold move aimed at ensuring that the city's residents continue to receive the essential services they need while maintaining the city's allure for visitors. By shifting the financial burden towards those who benefit from Amsterdam's unique charm, the city is taking steps to strike a balance between tourism and local needs. While this may mean slightly higher expenses for tourists, it is a necessary step to ensure that Amsterdam remains a thriving and sustainable destination for years to come.

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