Tuesday

25th Sep 2018

Belgium ordered to repay energy levies to EU

  • Commission halted payments of the Brussels levies, but restarted paying after Electrabel threatened to cut power (Photo: clappstar)

Belgium has to refund the Brussels-based EU institutions more than a hundred monthly payments the Brussels-Capital Region had charged them.

The Court of Justice of the European Union ruled on Thursday (14 January) that Belgium had no right to collect the monthly contributions, connected to electricity and gas bills, because they are indirect taxes and the EU is exempt from such levies.

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It is not clear how much money Belgium now owes the EU, but Flemish media spoke of a “substantial” amount. A contact at the European Commission said it is too early to say what the total amount would be.

Thursday's decision by the Luxembourg-based court ends a dispute which began in 2004.

That year, the EU institutions' electricity and gas provider, Electrabel, started to specify “regional contributions” on the invoices. The Brussels regional government required Electrabel to collect these contributions, which it uses to finance public service tasks like street lighting.

Soon after, the European Commission asked Brussels to be exempt from the payments, as Belgium, along with the other founding member states of what were then the European Communities, had signed in 1965 a protocol establishing that member states “shall, wherever possible, take the appropriate measures to remit or refund the amount of indirect taxes or sales taxes”.

The Commission stopped paying the contributions in 2005, but when Electrabel threatened to disconnect the EU's electricity supply, it started paying again in 2008.

While the Belgian federal government, which collected similar contributions, granted the EU exemption, the regional government of Brussels refused to budge.

It argued that “the electricity contribution constituted payment for an identified service from which the Commission had benefited or could benefit”.

But the Court of Justice has now ruled that this is not true.

For example, the money was used to finance public lighting, but according to the court “that is a public utility service which is not aimed specifically at the EU institutions, but at any person in the streets of Brussels, whether or not the end customer of an electricity supplier”.

It said on Thursday “the contested contributions paid by the EU institutions clearly also serve the purpose of financing public service tasks from which those institutions are incapable of benefiting”.

The court ruled “that by not exempting the EU institutions from the contributions … and by objecting to the refund of the contributions thereby collected by the Brussels-Capital Region, the Kingdom of Belgium has failed to fulfil its obligations” under the 1965 protocol.

The court also ordered Belgium to refund the EU institutions.

The Brussels region's energy minister, Celine Fremault, told Flemish media on Thursday she would not comment yet.

“We take note of the judgment. We will analyse the judgment first,” she said. On Friday morning, a spokesperson for the regional government told this website Fremault was “preparing an answer”, but did not provide one by the end of the afternoon.

A spokesperson for the EU commission spoke in similar terms.

"We take note of the judgment and we will be in contact with the Belgian authorities in due course," the commission said.

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