From 1 September 2015, VAT on electricity will increase from 6% to 21% for all private consumers. What are the implications of this change?

This is causing a stir and is the source of many queries by Belgian households. Will VAT at 6% be applied proportionally throughout the duration of the electricity contract? What will be the cost to the average household of this increase? Find out in our new article.

Who is affected by this increase?

The increase in VAT from 6% to 21% affects all private customers that have a residential contract with their energy supplier. Note that all active electricity suppliers in Belgium will apply this increase automatically on 1 September 2015.

Application of VAT at 21%

Two cases can be distinguished:

Your contract began before 1 September 2015;
Your contract will begin after 1 September 2015 (following a change of provider or moving house, for example).

Remember that if you want to change electricity supplier to save money, we invite you to participate in our group energy purchases or to compare supplier rates via our price comparison website.

1. Your contract started before 1 September 2015

In the event your contract started before 1 September 2015, 6% VAT will be applied until 31 August 2015 and then the provider will apply a rate of 21% from 1 September.

For your consumption between May and September 2015, your provider will apply VAT at 6% and for subsequent consumption, 21% VAT will be charged.

2. Your contract will begin after 1 September 2015

If your contract starts as of the month of September 2015, 21% VAT will be applied immediately by your provider on your monthly payments and your settlement invoice.

How to limit the effect of the increase in VAT on your bill?

According to our calculations, because of the increase in VAT from 6% to 21%, the average household bill will increase more than €100 per year. If you consume more than 3,500 kWh, the bill may be even higher.

To minimize the effect of this increase, Wikipower offers many solutions throughout the year:

Tips to reduce electricity consumption;
Group purchase of insulation to insulate the walls and the roof through quality, competitive partnerships;
Group purchases of photovoltaic solar panels to become self-reliant;
…

But there is a simpler solution to make this increase less painful: change provider and choose the cheapest supply of electricity on the market!

Since the electricity market was liberalized in 2012, you can choose your energy supplier freely, without paying termination fees and without administrative procedures.

In fact, according to a study by the CWaPE (Commission Wallonne pour l’Énergie), promoting competition by switching from a long-time provider to a provider that is adapted to your electricity consumption profile can lead to substantial savings.

Walloon consumers who have chosen a product suited to their consumption have made substantial savings compared to consumers who did not take an active choice and who are still powered by their designated provider. This applies to all categories of consumers.

During the first half of 2015, this saving is progressing in electricity and has risen in June 2015 to €62/year (or more than 8% of the overall bill) for Dc* type customers while it is stable for gas at €175/year (or more than 11% of the overall bill) for D3** type gas consumers.

Wait no longer, compare and find right now the provider that is most suited to your electricity consumption on the CREG-approved www.comparateur-energie.be website.

If you have any questions or you wish to be guided by one of our consultants to compare the different suppliers, you can get free support via e-mail at info@energyprice.be and also by phone on 0800 37 456.

*Dc-type customer: a customer consuming 3,500 kWh/year of electricity with a dual tariff connection.
*D3-type customer: a customer consuming 23,260 kWh/year of gas.