Environmental taxation in Belgium Prof. Dr Environmental taxation in Belgium Prof. Dr. Michel Maus Tax Law Department VUB 25-5-2018 Herhaling titel van presentatie

Belgium overall statistics (% of GDP) 2002 2012 EU ranking Environmental taxes 2.4% 2.2% 23 Energy 1.4% 1.3% 27 Transport fuel taxes 1.3% 1.1% 26 Transport (excl. fuel) 0.8% 0.7% 9 Pollution/resources 0.17% 0.14 % 9 25-5-2018

Belgium overall statistics (% of GDP) Conclusion of the European Commission: Revenues from environmental taxation have declined in percentage of GDP since 2005. In 2012 environmental tax revenue amounted to 2.2 % of GDP, below the EU average (2.4 %). Revenues from energy taxation are the second lowest in the EU (1.3 % compared to an EU average of 1.8 % which is remarkably low considering that Belgium has one of the highest tax-to-GDP ratios. Little political interest in environmental taxation in Belgium? 25-5-2018

Scope of environmental taxation in Belgium Direct environmental taxation Direct link between ecology and taxation F.i.: energy tax, fuel tax Indirect environmental taxation Indirect link between ecology and taxation Ecological interest as a side effect of taxation Trying to change public behaviour by means of taxation Environmental influences in VAT, Income tax etc. Stimulation of environmental friendly renovation of houses ( lower VAT-rate, tax deduction of renovation costs, … ) Higher tax deduction for low energy cars Lower taxation for the use of energy friendly company cars 25-5-2018

Division of tax competences in the Belgian federal structure There are 3 levels of authority in Belgium Federal level (Belgium) Regional level (Flemish region, Walloon region and Brussels region) Local level (provinces, cities and communities) Each level of authority has the constitutional power to tax … but the federal level can limit the tax powers of both the regional and the local levels Each level of authority can implement environmental taxes … as far as the specific competence to implement environmental taxes is not limited by federal law 25-5-2018

Division of tax competences in the Belgian federal structure Relation between the federal level and the regional level Federal law 23/01/1989: Regional prohibition to implement similar taxes as the existing federal (green) taxes F.i. federal environmental tax on disposable plastic bags and disposable plastic forks, knives and spoons F.i. federal tax on beverage packaging Federal prohibition to implement taxes on waste and water Exclusive regional tax power to tax waste and water Special federal law 16/01/1989: Federal level assigns tax powers to the regions F.i. circulation tax, vehicule registration tax 25-5-2018

Division of tax competences in the Belgian federal structure Relation between the federal level and the local level Income Tax Code Local prohibition to implement similar taxes as the existing federal income taxes Relation between the regional level and the local level Tax Code of assimilated income taxes Local prohibition to implement similar taxes as the existing regional circulation tax and the vehicule registration tax 25-5-2018

Environmental taxation in Belgium The federal level Direct environmental taxation Tax on beverage packaging 1,41 eur/hectoliter reusable packages – 9,86 eur/hectoliter non-reusable packages Several exceptions ( federal law 17/06/2013 f.i. alcoholic beverages and coffee) As from 01/01/2013 abolishment packaging tax for batteries, cartridges, disposable shaving equipment etc. Tax on disposable plastic bags (3 eur/kg) and disposable plastic forks, knives and spoons (3,6 eur/kg), plastic foil for domestic use (2,7 eur/kg) and aluminium foil for domestic use (4,5 eur/kg ) Fuel tax Leaded or unleaded fuel and kerosine: 28,6317 eur/1000 liter Diesel: 14,8736 eur/1000 liter Cokes: 3,00 eur/ 1000 kg Energy tax Electricity: 1,9088 eur/MWH 25-5-2018

Environmental taxation in Belgium The federal level Indirect environmental taxation Income taxes Personal income tax Carbon-related taxation of the use of company cars Increased investment dedecution for ecological investments 13% instead of 3% Tax deduction for ecological renovation of houses As from 2013 only for roof isolation (30% - max 3.010 Euro ) Corporation tax Carbon-related tax deduction of the costs of company cars (50% - 120%) VAT As from 01/04/2014: lower VAT rate for the use of electricity (6% instead of 21%) 25-5-2018

Environmental taxation in Belgium The regional level Direct environmental taxation Flemish region and Walloon region Taxation on garbage collectors Taxation on the pollution of water Indirect environmental taxation Property tax Walloon region: lower % property taks for low energy houses 25-5-2018

Environmental taxation in Belgium The local level Indirect environmental taxation Taxation on garbage collection Taxation on the spread of commercial leaflets 25-5-2018