Mineral Oil Tax on heavy oil (diesel) used for private pleasure navigation


This is relevant to all owners of diesel-propelled craft which are used for private pleasure navigation. This includes owners who hire out craft and people who hire them for that purpose.

The use of Marked Gas Oil (MGO) for private pleasure navigation is no longer permitted since 1 January 2020.

Previously, excise law allowed MGO purchased at a reduced rate of Mineral Oil Tax (MOT) to be used for private pleasure navigation. This arrangement was subject to craft owners filing an annual return for MGO purchased and paying the balance between the MGO rate and the auto diesel rate.

The law regarding the use of MGO for private pleasure navigation changed on 1 January 2020. From this date, the use of MGO was prohibited and private pleasure craft owners can only purchase and use auto diesel as fuel for private pleasure navigation.

The background to this change is a ruling (C-504/17) made by the Court of Justice of the European Union (CJEU). In October 2018, the CJEU found that Ireland’s arrangements breached both the Energy Tax Directive and the Fuel Marking Directive. Amendments to excise law to address this were introduced in Finance Act 2019.

Next: What is private pleasure navigation?