Natural resources tax for a borehole: who has to pay it

When the tax has to be paid

Section 19 of the Natural Resources Tax Law states that tax on the abstraction of surface water and groundwater is paid if abstraction exceeds 10 cubic metres a day. If the limit set in the permit is less than 10 m³ a day, tax is paid only on the volume above that limit.

The taxpayer is a person who has, or should have had, an environmental permit or a subsoil use licence and who extracts natural resources subject to the tax. A household without a permit and with low consumption pays no tax on the water from its own borehole.

To give a sense of how high this limit is: for billing without a meter, the binding regulations of Ādaži municipality assume 1 m³ per person per month for water from a local source. By this norm, 10 m³ a day would equal the consumption of more than 300 people.

Rates for water abstraction

The rates have applied since 01.01.2017. Water used as an ingredient in making drinks or food is taxed at the water supply rates. We have not checked which value group the water of a particular aquifer falls into; confirm this with the State Environmental Service (VVD) when you apply for the permit.

Three limits: licence, permit and tax

The limits sound similar, but they are not the same:

So a borehole from which exactly 10 m³ a day is taken already needs a permit, but no tax is due yet. On the other hand, a shared borehole whose water is used by more than 50 people needs a permit even if the volume is small. How the licence is arranged: borehole registration.

If consumption is higher: the permit and reports

1. Permit The water use permit is requested from the regional environmental board of the State Environmental Service at least 60 days before the activity starts. Maps, land title documents, an expert opinion on the permissible hydrogeological changes and the borehole passport are attached.
2. Fee and validity The state fee is €78.26. The permit is valid for the whole period of the activity and is revised once every seven years.
3. Large abstraction If you plan to abstract more than 100 m³ a day, you also need a groundwater deposit passport.
4. Tax return The return is submitted to the State Revenue Service by the 20th of the month after the end of the quarter, and the tax is paid by the 23rd. If the tax does not exceed €142.29 a year, the return is submitted once a year by 20 January and paid by 23 January.
5. The “2-Ūdens” report The statistical report for the previous year is filled in online on the LVĢMC website by 1 March. It is submitted by holders of water use permits, not by every household.

How such a borehole is installed and what a business has to arrange before drilling: borehole for a business.

When a family home should still think about it

• Several houses or a gardening association share one borehole: if more than 50 people use the water, a permit is needed regardless of the volume.
• The house has a guesthouse or another business activity with high water consumption.
• A large greenhouse or irrigation system that runs every day in dry weather.

In these cases it is worth measuring consumption with a water meter, so that it is clear whether the limit is being reached.

What really costs money for a family home borehole

For a family home borehole, the main costs are the drilling (from €65/m; a typical ~30 m borehole from €2,000 without the pump and the pipe run), the equipment and the electricity for the pump, not the tax. The only state fee is usually the approval of the borehole passport by LVĢMC: €115.34. A licence (state fee €35.57) is needed if the borehole is deeper than 20 m. More details: boreholes and prices.