{"id":10762,"date":"2018-12-03T11:37:41","date_gmt":"2018-12-03T10:37:41","guid":{"rendered":"https:\/\/www.uhy-fay.com\/european-companies-face-taxes-on-fuel-18-higher-than-world-average\/"},"modified":"2018-12-12T12:35:28","modified_gmt":"2018-12-12T11:35:28","slug":"european-companies-face-taxes-on-fuel-18-higher-than-world-average","status":"publish","type":"post","link":"https:\/\/www.uhy-fay.com\/en\/blog\/european-companies-face-taxes-on-fuel-18-higher-than-world-average\/","title":{"rendered":"European Companies Face Taxes on Fuel 18%"},"content":{"rendered":"<div id=\"page\" class=\"hfeed\">\n<div id=\"main\">\n<section id=\"primary\">\n<div id=\"content\" role=\"main\">\n<div class=\"article-centering\">\n<div class=\"category-list\">\n<div class=\"category-list-content\">\n<div class=\"single-post-content\">\n<p class=\"Standard\">European* companies face taxes as a percentage of the price of fuel on average 18% higher than the world average, putting them at a serious disadvantage and potentially risking economic growth, shows a new study by UHY, the international accounting and consultancy network.<\/p>\n<p class=\"Standard\">UHY explains that on average taxes comprise 59% of the cost of the price of petrol and 52% of the cost of the price of diesel, compared to the global averages of 50% and 44% respectively.<\/p>\n<p class=\"Standard\">Taxes amount to 60% of the cost of diesel in the UK, the highest in the study, and 53% of the cost in Germany.<\/p>\n<p class=\"Standard\">In many major economies outside of Europe, taxes make up significantly lower proportions of the price of petrol and diesel, including:<\/p>\n<ul>\n<li>Japan, where 42% of the cost of petrol and 33% the cost of diesel is from tax<\/li>\n<li>Canada, with taxes making up 35% of the cost of petrol and 32% of diesel<\/li>\n<li>United States**, where taxes comprise 17% of the cost of petrol and 18% of diesel<\/li>\n<\/ul>\n<p>Higher fuel taxes means that the cost of filling the tank*** of a Ford Transit van with petrol in Europe \u2013 indicative of a typical business expense \u2013 amounts to USD$135 on average. This compares to a global average of USD$111.<br \/>\nUHY explains that higher fuel duties and taxes in Europe are the main contributor to higher fuel prices for petrol, diesel and Liquefied Petroleum Gas.<br \/>\nThe cost of filling a tank of a Ford Transit with diesel is 24% higher on average in European countries. As diesel is used in the majority of commercial vehicles, this heavy burden is borne primarily by businesses.<br \/>\nIt is also 2% more expensive in Europe for Liquefied Petroleum Gas (LPG), a more environmentally-friendly alternative to petrol or diesel.<\/p>\n<p class=\"Standard\">Bernard Fay, Chairman of UHY, comments: \u201cHigher fuel taxes hit almost all businesses, and they can ultimately impede economic growth.\u201d<\/p>\n<p class=\"Standard\">\u201cFor any government, taxes on petrol and diesel are a key tool for helping to cut greenhouse gas emissions and can be used to fund infrastructure spending. However, for businesses, especially small and medium enterprises (SMEs), they can represent a significant operating cost, especially in the retail and distribution sectors.\u201d<\/p>\n<p class=\"Standard\">\u201cThere needs to be a balance to ensure fuel and tax costs do not become prohibitive. The relatively lower rates in major developed economies, most notably the United States, compared to its international competitors in Europe shows that a balance can be struck.\u201d<\/p>\n<p class=\"Standard\">\u201cGovernments can consider initiatives such as freezing fuel duties or even cutting the rates. There needs to be greater international cooperation to ensure there is not too much discrepancy in fuel prices between different countries.\u201d<\/p>\n<p>UHY studied fuel taxes and prices in 24 countries around the world, looking at the cost of petrol, diesel and LPG\/Autogas and the percentage of the price that came from tax.<br \/>\nFrance ranked the highest for tax comprising the largest percentage of the total price of petrol \u2013 64%. Denmark ranked the most expensive in the UHY study for the overall cost of filling a tank with petrol \u2013 costing USD$160.<br \/>\nUHY adds that fuel can also be hit by a range of different taxes. In the Republic of Ireland, for example, there are three taxes on fuel, with Value Added Tax (VAT), the Excise and Carbon Tax, and the National Oil Reserves Agency (NORA) Tax.<br \/>\nThere are also three fuel taxes in Poland, with VAT, excise duty and a tax fuel surcharge, with certain subsidies available for farmers.<br \/>\nHowever, in 2018, the Polish Government plans to introduce a fourth levy on fuel \u2013 an additional surcharge of 3 USD cents per litre \u2013 used to fund the development of electric forms of transport.<br \/>\nPiotr Wozniak of UHY member firm UHY ECA Group in Poland, comments: \u201cWhile wanting to fund eco-friendly projects is a worthy endeavour, too high a level of taxes can discourage business investment.\u201d<br \/>\n\u201cMany emerging markets around the world are focused on ways to help businesses lower their operating costs. As a result, Poland could be at risk of losing business to rival economies with cheaper fuel taxes. The Government should consider what possible subsidies it could offer.\u201d<br \/>\nIn the United States Federal taxes on gasoline average just slightly over 18 cents per gallon, with 60% of all revenue raised spent on highway and bridge construction. Only 27, out of 50, states currently impose taxes on LPG.<br \/>\nUHY explains that in the US funds raised from fuel taxes can be used to fund a wide range of initiatives beyond road and infrastructure improvements to include educational funding.<br \/>\nScott Miller, National Petroleum Group Leader of UHY member firm UHY Advisors in the United States comments: \u201cLower taxes levied on fuel can be a powerful stimulant to increasing economic growth. It is a cost factor that affects virtually every business.\u201d<\/p>\n<p class=\"Standard\">\u201cWhile the price of petrol is dynamic and can vary across individual states in the US, the trend is clear. The overall level of taxes levied on fuel tends to be lower outside of Europe. That may be a factor in underlying the US\u2019 strong economic growth.\u201d<\/p>\n<p><strong>Filling the tank of a Ford Transit with petrol \u2013 proportion of cost made up of fuel cost and tax (Major economies and world averages)<\/strong><\/p>\n<p><strong>Filling the tank of a Ford Transit with petrol: breakdown of cost of fuel and tax<\/strong><\/p>\n<p><strong>Filling the tank of a Ford Transit with diesel: breakdown of cost of fuel and tax<\/strong><\/p>\n<p><strong>Filling the tank of a Ford Transit with Liquefied Petroleum Gas (LPG): breakdown of cost of fuel and tax<\/strong><\/p>\n<p class=\"Standard\"><i>*EU countries<\/i><\/p>\n<p class=\"Standard\"><i>**US figures based on averages across US states<\/i><\/p>\n<p class=\"Standard\"><i>***Tank size: 80 litres for petrol and diesel, 72 litres for LPG<\/i><\/p>\n<p class=\"Standard\"><i>****Tax rates include VAT, some or all of which may be reclaimed by businesses in some countries, including EU member states<\/i><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Taxes amount to 60% of the cost of diesel in the UK, the highest in the study, and 53% of the cost in Germany.<\/p>\n","protected":false},"author":4,"featured_media":8476,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[50],"tags":[],"class_list":["post-10762","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fiscal-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>European Companies Face Taxes on Fuel 18% | UHY Fay &amp; 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