05 March 2014

From 1 April 2014, the VAT rate for electricity is lowered from 21% to 6% for Belgian families. This reduced rate will remain in force at least until the end of 2015. Afterwards, the effects of this measure will be evaluated, in view of a decision regarding the retention of this measure. This decision is part of the economic recovery plan of the Belgian federal government. The Belgian VAT administration explains the regulation in a list of Frequently Asked Questions.

Beneficiaries of the 6% VAT rate

The new reduced VAT rate applies only to domestic customers. For consumers buying electricity for commercial or other professional purposes, the 21% VAT rate remains to apply (companies, non-profit organisations, municipalities, etc.). But also as an individual, you may want to verify whether you signed a professional or residential contract.  

What about mixed electricity consumption?

Should you purchase electricity for both domestic and professional purposes on the basis of one single contract, the VAT treatment is determined by the nature of the contract concluded. If you signed a ‘residential’ contract, then you can benefit from the 6% VAT rate. However, the 21% VAT will apply if you signed a ‘professional’ contract.  

Prepayments March 2014

Prepayments invoiced until 31 March 2014 will still be subject to the 21% VAT rate. However, this is regularised afterwards with the settlement of your actual electricity consumption, so as you will pay only 6% VAT for the electricity consumption as of 1 April 2014.  

The entire invoice subject to 6%?

All components of the invoice in relation to the supply of electricity are subject to 6% VAT. This includes the energy cost, network tariff, taxes, surcharges, and levy.  

Unoccupied premises

In the case of unoccupied premises, the VAT rate will, again, depend on the contract concluded with your provider.  

Impact of the regulation

The reduction of the VAT rate implies that from 1 April 2014, you will be paying 12.4% less for an identical electricity bill, compared to the current situation. This will subsequently result in a less accelerating indexation of wages in the course of 2014, allowing a saving of labour costs. According to the estimates of the Central Planning Bureau, this VAT reduction will lower the total labour costs by EUR 650 million.  


Should you have any further question or require a personal advice with respect to the impact of these rules on your company, please contact your usual contact person at BDO or you may send an email to [email protected] for the attention of one of the members of the Competence Centre VAT:

  • Erwin Boumans, 02/778.01.00
  • Pascal Dauw, 09/210.54.10
  • Kaatje Bondewel, 02/778.01.00
  • Brigitte Braeckmans, 03/230.58.40
  • Joëlle Teuwen, 081/ 20 87 87

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