The rise in energy prices following Russia's invasion of Ukraine has hit households hard, especially those on low incomes, according to Euronews. Although prices have stabilized to some extent, energy bills are still a burden for many. Taxes account for a large share of gas and electricity costs, varying significantly across Europe. Some countries offer subsidies or assistance to support households.

In these cases, taxes may even show up as negative values.

How much of your energy bill goes toward taxes—including energy taxes, fees, and VAT? In which countries do people pay the most taxes overall? And where do governments step in with subsidies or support schemes?

The Household Energy Price Index (HEPI), compiled by Energie-Control Austria, MEKH, and VaasaETT, tracks electricity and gas prices for domestic use in European capitals. In addition to energy and distribution costs, the breakdown shows energy taxes and VAT.

As of April 2024, the average share of total taxes in household electricity prices in EU capitals is 22% — made up of 8% energy taxes and 14% VAT. This share ranges from -26% in Amsterdam to 49% in Copenhagen, followed by 41% in Stockholm. The average for EU capitals is 22%.

Negative tax in Amsterdam and Luxembourg

In Amsterdam, energy taxes are -43% and VAT is 17%, resulting in a significant negative overall tax share. Without this effect, VAT accounts for 17% of the price breakdown.

According to the HEPI report from January 2020, the typical consumer in Amsterdam does not pay energy tax due to the increased tax credit, which exceeds the specified amount of energy tax.

Instead, they receive a refund of the amount exceeding the tax credit. The aim is to encourage electrification and the switch from gas heating and appliances.

A similar case can be found in Luxembourg, where the energy tax is -13% and VAT is 7%. The policy there aims to stabilize prices at 2022 levels.

In Valletta, Nicosia, and Dublin, the share of taxes in electricity bills is also relatively low, at 11% or less.

Apart from the two Scandinavian capitals, the share of total taxes exceeds 30% in several other cities, including Brussels (37%), Berlin (34%), Oslo (33%), and Madrid and Helsinki (32%).

Gas taxes exceed electricity taxes in EU capitals

For gas prices for final consumers in the residential sector, the average share of taxes in EU capitals is 28%, which is higher than for electricity. It ranges from 5% in Zagreb to 49% in Amsterdam.

In the Dutch capital, energy tax for residential natural gas consumers accounts for around 32% of the end-user price.

Residents of Berlin (40%), Vienna (32%), Rome and Stockholm (both 31%) and Paris (30%) face the highest overall taxes on gas after Amsterdam.

In contrast, after the Croatian capital, the lowest overall tax shares in gas prices for domestic use are found in Athens (9%), Belgrade (9%) and London (11%).

In Vilnius, a typical household receives an energy tax rebate, resulting in a negative energy tax share of -5%.

Key factors behind differences in energy taxes

"Energy taxes depend on national policies, environmental plans and different market structures in general," said Rafaela Grigoriou, project manager at HEPI and head of the Greek office of VaasaETT, and Ioannis Koras, senior energy market analyst at VaasaETT.

They pointed out, for example, that Denmark has used high energy taxes as a tool for transitioning to green energy, subsidizing investments in renewable energy systems (RES) and promoting energy efficiency, which has made the country a leader in wind energy.The role of national policies in energy taxation is particularly clear in some cases. Grigoriou and Koras pointed out that consumers in Amsterdam pay the highest taxes on natural gas in Europe, due to a national climate policy aimed at reducing gas consumption.

In contrast, households receive a significant reduction in taxes on their electricity bills.

“The aim is to encourage a shift away from gas heating and promote electrification,” they added.

Tax share of nominal expenditure

When comparing cities or countries, it is important to distinguish between the share of taxes in energy bills and the amount actually paid. These are different indicators, as the total amount of taxes depends on the underlying price of energy.

For example, the tax share for electricity is 21% in both Rome and Budapest. However, this does not mean that consumers pay the same amount in absolute terms. In Budapest, 21% equates to 1.92 c€/kWh, while in Rome the amount is 6.8 c€/kWh — a significant difference.

Electricity and gas prices in Europe

Electricity and gas prices for end consumers in households vary significantly across Europe.

According to HEPI, in April 2025, electricity prices ranged from 9.1 c€/kWh in Budapest to 40.4 c€/kWh in Berlin. Gas prices ranged from 2.5 c€/kWh in Budapest to 34.1 c€/kWh in Stockholm.

When comparing energy prices, it is important to take purchasing power standards (PPS) into account. In our article “Electricity and gas prices in Europe,” we take a closer look at prices in both nominal terms and PPS-adjusted values and explain why they can vary significantly between countries. |BGNES