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Tax authorities may ask you to pay a Special Energy Contribution


Basic Energy Package

In 2022, the Belgian Government announced a wide range of measures to assist Belgian households facing exorbitant energy bills due to the global crisis.

A Basic Energy Package was agreed to in September 2022 and basically divided into two phases (Package 1 and 2). The first package included a discount on people’s energy bills in November and December last year. A premium was given for gas (€135 per month) and electricity (€61 per month), providing a total of €392 per taxpayer for Basic Energy Package 1.

According to the FPS ECONOMY, both amounts were either deducted from your advance (or settlement) energy invoice or the energy supplier paid out the above lump sum directly to the client (labelled as Federal Basic Package). People who thought they were eligible but did not receive anything,  could manually request Package 1 from the FPS Economy until 30 April 2023.

The premium was not available for second residencies or for those who benefit from a social energy rate.

No action required

An important element of these temporary support measures, is that the highest earners need to repay part of the premium afterwards through their taxes. It will be classed as a Special Energy Contribution and would be settled via the personal tax assessment for income year 2022 (tax year 2023).

Since the repayment will be calculated automatically by the tax authorities (based on info provided by the FPS ECONOMY), taxpayers are not required to declare anything in their tax return themselves. As this still may come as a surprise, we understand people will have questions about it when they receive their tax assessment for 2022 later this year.

Highest earners excluded

Who is considered a ‘highest earner’ obviously depends on your level of income. Only if you exceed the following annual net income threshold, you will be request to repay (part of) the premium:

  • Single Filers: total net income (for 2022) of 62,000 or above
  • Joint Filers: total net income (for 2022) of 125,000 or above

These amounts are further increased by:

  • €3.700 per dependent person living in your household.
  • €1.850 per child under a co-parenting arrangement. This increase is granted to each parent individually.

The tax authorities look at your total net income of 2022. This is your total income before taxes, but after social security contributions and business expenses. It includes all types of income, not just professional income, but also property income or ‘miscellaneous’ income. Interest and dividend income from investments are not taken into account. It is not really clear why private investment income should not be considered for the threshold.

Total net income is also determined before deduction of any alimony or financial support payments.

If the taxpayer’s household income is below the above thresholds, the authorities will not ask you to repay anything and your tax assessment for 2022 will not be affected by the Special Energy Contribution. It should also be highlighted that the contribution itself, is not a deductible business expense for taxpayers who worked from home in 2022.

Special Energy Contribution

How much you will be asked to repay is based on a specific formula:

[Energy premium received (in 2022) x average tax rate (for 2022) x 1.5]

The average tax rate is obtained by dividing your total income tax due for 2022 by your taxable income for the same year. It reflects the average tax burden of each taxpayer. For higher incomes this is usually anywhere between 35% and 45%.

For couples filing a joint tax return, the average of each partner’s average tax rate is considered. For example, if it is 38% for one partner and 43% for the other, the Special Energy Contribution will be calculated at an average tax rate of 40.5%.

The following example may illustrate how this works in practice:

Bill’s total net income for 2022 is €62,671.20. Since that exceeds the Single Filer Threshold of €62,000, Bill will need to pay the Special Energy Contribution. His average tax rate for 2022 is 35.9%. The Special Energy Contribution will therefore amount to 211.09 (or €392 x 35.9% x 1.5).

In other words, from the premium he received under Basic Energy Package 1 of 392, Bill will only be able to keep an amount of 180.91.

Also for tax year 2024

Since there is also a Basic Energy Package 2 that covered the months of January, February and March 2023, the above will also be relevant again for next year’s tax filing (income year 2023).

Under Basic Energy Package 2, the premium given for gas (€135 per month) and electricity (€61 per month), remained the same, but covers 3 instead of 2 months, so it should give a total premium of €588 per taxpayer instead for 2023.

The above parameters to calculate the Special Energy Contribution for 2023 (tax year 2024) will remain the same. However, to determine whether you actually need to pay the Special Energy Contribution for 2023, the tax authorities will take into account your earnings of 2022 (and not those of 2023).

An additional complexity is that taxpayers are often not aware themselves that they received a premium under the Basic Energy package, either as a discount on their energy bill or a direct payment by their energy supplier. Taxpayers should therefore properly inform themselves and to the necessary research before thinking of challenging their tax assessment for 2022.