Belgium must repay Luminus nearly €30 million in wrongly collected taxes

Belgium must repay Luminus nearly €30 million in wrongly collected taxes
Credit: Belga/Bruno Fahy

The Belgian Government has to repay energy supplier Luminus nearly €30 million due to wrongly collected taxes. Another supplier, Engie, is seeking to recover an ever larger amount, about €100 million, in a similar case.

The amounts come from the so-called "federal surcharge" tax on gas and electricity, and the way it was levied between 2004 and 2014 under the Federal Government led by Prime Minister Guy Verhofstadt (Open VLD). It served to finance the workings of the Commission for Electricity and Gas Regulation (CREG) and to allow public centres for social welfare to fund all kinds of energy measures.

Several energy suppliers recently challenged that tax in court, but only in the very specific situation in which electricity is generated from natural gas, via gas-fired power plants. In that case, the suppliers are first taxed on the natural gas as the "raw material" (or fuel) for their electricity, and then again on the electricity itself.

Three suppliers argued that European regulations prohibit a tax on energy used to generate other energy, and referred to a European directive dating back to 2003 – that took the Belgian State ten years to transpose into law. Therefore, during those 10 years, the illegal tax remained in force.

In 2017, Luminus won the case, but the Belgian State appealed and argued that, in the meantime, the tax had already been passed on to consumers. This week, however, the appeal judge again ruled in favour of Luminus, pointing out that this "passing on" of the tax to consumers had not been proven.

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Luminus said it was satisfied with the ruling, "even though it has taken some time. We now hope to recover the amounts as soon as possible," the company told VRT. The other suppliers that have gone to court are E.on and Engie. While the former no longer exists in the meantime (in Belgium), the latter is still waiting for an appeal ruling.

In the first instance, Engie was proven wrong by the court – which is strange because Luminus did get a positive ruling on the same ground. Whether the court of appeal will rule along the same lines for Engie as it did for Luminus remains to be seen.

Engie filed its case more than two years after Luminus and the appeal procedure is still ongoing. The verdict is seen as massively important for the Belgian State given that Engie is claiming back around €100 million in tax.

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