Levy

A levy is defined [in IFRIC 21 ] as an outflow of resources (embodying economic benefits) that is imposed by governments (including government agencies and similar bodies whether local, national or international) on entities in accordance with legislation (i.e., laws and/or regulations)1.

Included (in scope) Excluded (out of scope)
 
  • IFRIC 21 addresses the accounting for a liability to pay a levy if that liability is within the scope of IAS 37. It also addresses the accounting for a liability to pay a levy whose timing and amount is certain.
IFRIC 21 does not apply to government payments that:
  • Do not meet the definition of a levy;
  • Are within the scope of other Standards (such as income taxes that are within the scope of IAS 12 Income Taxes);
  • Are made by an entity for the acquisition of an asset from a government;
  • Are for the rendering of services under a contractual agreement with a government;
  • Are imposed for breaches of legislation (e.g., fines or other penalties);
  • Arise from emission trading schemes.

An example from the Netherlands

Dutch water boards (Dutch: waterschappen or hoogheemraadschappen) are regional government bodies charged with managing water barriers, waterways, water levels, water quality and sewage treatment in their respective regions. These regional water authorities are among the oldest forms of local government in the Netherlands, some of them having been founded in the 13th century.

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When referring to the administrative body, English translations of waterschap are “water board”, “water control board”, “district water board” or “regional water authority”, the last word being recently adopted by the water boards as a preferred English translation on grounds that it is less ambiguous. The jurisdiction of a Dutch regional water authority is generally referred to as the “water board district” or “regional water authority district”. These translations also apply to hoogheemraadschap, which is translated in the same way as waterschap.

There are 3 types of water taxes/levies. The type of tax you must pay depends on your situation. You must always pay a water system charge. Is your home connected to the public sewer system? Then you must also pay a water treatment charge. If your home is not connected to the public sewer system you have to pay a pollution charge.

There are 3 types of water authority tax:

Levy
Kinderdijk, the Netherlands – To drain the polder, a system of 19 windmills was built around 1740.
  • water system charge
  • water treatment charge
  • pollution charge

Watersysteemheffing (Water system charge)

Do you live in the area of the Regional Public Water Authority Amstel, Gooi en Vecht? Then you must pay a water system charge. This way you contribute to a good management of the water cycle. How much water system charge you must pay depends on your situation:

  • Ingezetenen (Residents): you are a resident and pay per household.
  • Gebouwd (Buildings): you are the owner of 1 or more buildings and pay a percentage of the WOZ (the Valuation of Immovable Property Act) value.
  • Ongebouwd (Land without buildings): you are an landowner and pay per hectare (10,000 m2).
  • Natuurterrein (Nature area): you are the owner of a nature area and pay per hectare (10,000 m2).
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Zuiveringsheffing (Water treatment charge)

Is your home connected to the public sewer system? Then you must pay a water treatment charge. With this, you help to pay to clean waste water. The amount you pay is based on the number of ‘pollution units’ (ve). A ve is the average amount of pollution of 1 person per year. Do you live alone? Then you pay for 1 ve. Households of 2 or more people pay for 3 ve. This also includes children under 18 years of age.

Verontreinigingsheffing (Pollution charge)

If your home is not connected to the public sewer system, you pay a pollution charge. You help to pay to keep the surface water clean. This charge is also based on the number of ‘pollution units’ (ve). This is the amount of pollution that 1 person causes on average per year.

Levy

Levy

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