Increase in VAT on electricity: are you affected?

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:

1. Your contract began before 1 September 2015;
2. 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;