The whole farm model FASSET ver. 1.0 was used for evaluation of the environmental and economic consequences of implementing different nitrogen taxes. The taxation policies analysed were a tax on nitrogen in mineral fertiliser, a tax on nitrogen in mineral fertiliser and imported animal feedstuff, and a tax on the farm nitrogen surplus. In these scenarios, the tax price was equal to the price of the nitrogen in mineral fertilisers (0.67 € kg N−1). Four farm types were considered: arable on sandy soil, arable on loamy soil, pig production on sandy soil and pig production on loamy soil. Impacts of the taxes for each farm type on crop rotation, fertiliser use and pig production were estimated by the Linear Programming module of FASSET. The dynamic simulation module of FASSET evaluated the environmental and economic consequences of the new production plans. The social abatement cost of reducing nitrate leaching varied between 1 and 9 € kg N−1. None of the taxation policies was the most cost-effective for all farm types. Tax on mineral fertiliser favours pig producers, whereas the tax on nitrogen surplus favours arable farms. Thus efficient taxation schemes for reduction of nitrate leaching should differentiate between farm types rather than use uniform input taxes.