Belgium: Tax proposals in budget 2023 - 2024 include “windfall profits tax” on energy producers

Minister of Finance asked to submit tax reform proposal by 1 December 2022

“Windfall profits tax” on energy producers

The federal government reached an agreement on the budget for 2023 and 2024, which includes the following tax proposals:

  • Introduction of excess profits tax for energy producers with income above €180 per MWh between 1 January 2022 and 30 November 2022 and above €130 per MWh between 1 December 2022 and 30 June 2023 (possibly extended beyond June 2023)
  • Solidarity contribution from the oil sector
  • Permanent reduction in valued added tax (VAT) rate of 6% on gas and electricity (to be compensated by an adjustment of excise duties when prices normalize)
  • Extension of the rebate on household energy bills and of the reduction of excise duties on gas and electricity for businesses until March 2023
  • Minimum tax of 15% for companies with profits above €1 million by reducing the use of tax deductions from 70% to 40% (only in 2023)
  • Repeal of the notional interest deduction (at least for large companies)
  • Adjustment of tax treatment of foreign tax credit for royalties
  • Reform of the copyright regime as from 2024
  • Repeal of the tax reduction for second dwellings as from 2024
  • Denial of deduction for bank tax
  • Indexation of parafiscal company contribution
  • Reinforcement of packaging levy
  • Increased excise duties on tobacco, also excise duties on e-cigarettes as from 2024
  • Technical correction of implementation of VAT directive on e-commerce
  • Implementation of “health shift” by increasing VAT on unhealthy products and decreasing VAT on healthy products (such as vegetables and fruit)

Next steps

The Minister of Finance has been asked to submit a tax reform proposal by 1 December 2022.
 

Read an October 2022 report prepared by the KPMG member firm in Belgium

 

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