Chapter 14 VAT and Excise Duties
VAT is a consumption tax whose amount is proportional to the price. It raised 22,2% of total tax revenues in 2018. There are four different rates:
- The “normal” rate of 21% for most goods and services;
- The “reduced” rate of 6% for goods and services explicitly listed in Table A of the AR20 of 20/7/70:
- Living animals and agricultural services
- Food: meat, fish and sea food (except caviar and lobster), milk and dairy, eggs, honey, vegetables, grains, cereals, oil and fat, coffee, cacao, food for animals, etc.
- Non-alcoholic drinks including running water
- Medicines
- Culture: newspapers and magazines (except publicity), art and antiques, culture/sport/leisure institutions, royalties, hotels and camping
- Other goods: coffins, wheelchairs for disabled, orthopedics’ devices, devices for visually impaired people, etc.
- Other services: transport, maintenance and repair, renovation work in private housing, institutions for disabled people, social housing, teaching activities, etc.
- Living animals and agricultural services
- The “reduced” rate of 12% for goods and services explicitly listed in Table B of the AR20 of 20/7/1970:
- Restaurants (except drink services -> 21%)
- Margarine
- Social housing of private initiative
- Agricultural pesticides and fertilizers
- Coal, lignite and coke
- Restaurants (except drink services -> 21%)
- The “reduced” rate of 0% for goods and services explicitly listed in Table C of the AR20 of 20/7/1970:
- Rye and sorghum (grains)
- Scoria (metallurgical residual)
- Ossein (bones sub-product)
- Human blood and organs
- Wastes (from plastic, rubber, glass, paper, metal, leather, etc.)
- Rye and sorghum (grains)
The rates may be modified by tax reforms, but they were quite stable these latest years: only some goods moved from one rate to another (for example: VAT rate on electricity moved from 21% to 6% in 2014 and then back to 21% in 2016).
Excises duties are consumption taxes on particular products whose amount are proportional to quantities56. They raised 6,6% of total tax revenues in 2018. Products subject to excise duty are energy products, electricity, alcoholic beverages, tobacco and, to a very limited extent, some specific non-alcoholic beverages. Excises duties have several names (ordinary excise duties, special excise duties, energy contribution, control fee, etc.) and are piecemeal defined in different laws. The “total excise duty” is the sum of all categories. The rates differ a lot: in function of the good, its usage, in time (they may vary several times a year), etc.
Formula:
\[CP=(1+r_{\text{AV}})(1+r_{\text{VAT}})(PP+ED\times Q)\] where \(CP\) is the consumer price (all taxes included), \(r_{\text{AV}}\) is the “ad valorem” rate, \(PP\) is the producer price, \(ED\) is the total excise duty and \(Q\) is the quantity.
14.1 Energy products
The excise duties pertaining to energy products are summarized in Table 14.1.
| Energy product | 2019 | unit |
|---|---|---|
| Leaded petrol | 667.84 | 1000 litre |
| Unleaded petrol | ||
| High-sulfur | 615.87 | 1000 litre |
| High-sulfur | 600.16 | 1000 litre |
| Gasoil (propellant) | ||
| (sulphur>10mg/kg) | 615.87 | 1000 litre |
| (sulphur<=10mg/kg) | 600.16 | 1000 litre |
| Gasoil (Heating, non-business) | ||
| (sulphur>10mg/kg) | 8.7 | 1000 litre |
| (sulphur<=10mg/kg) | 7.3 | 1000 litre |
| Liquefied Petroleum Gas | ||
| Propellant | 0.0 | 1000 kg |
| Heating (non-business) | ||
| Butane | 18.6 | 1000 kg |
| Propane | 18.9 | 1000 kg |
| Heating (non-business) | 0.28 | Gigajoule |
| Electricity (non-business) | 1.9 | MWh |
14.2 Tobacco products
As shown in Table 14.2, both specific and ad valorem excise duties apply for manufactured products of tobacco. The latter are expressed as a percentage of the retail price (i.e. including VAT).
| Tobacco product | 2019 | unit |
|---|---|---|
| Cigarettes | ||
| Specific excise | 66.47 | 1000 units |
| Ad valorem excise (%) | 40.04 | |
| Cigars | ||
| Ad valorem excise (%) | 10.00 | |
| Smoking tobacco | ||
| Specific excise | 48.31 | kg |
| Ad valorem excise (%) | 31.5 | |
14.3 Alcoholic beverages
The excise duties pertaining to alcoholic beverages are summarized in Table 14.3. Beer containing more than 0.5% alcohol is subject to specific excises, the height of which is proportional to the degrees of Plato of the beer. For instance, the total excise duty on 1 litre of pilsner beer with a density of 12.5 Plato degrees amounted in 2016 to: \(12.5^{\circ}P \times 2.0 €/(hl/^{\circ}P) = 25.0 € / 100l = 0.25 €/l\).
| Alchoholic beverage | 2019 | unit |
|---|---|---|
| Beer | ||
| Standard rate | 2.00 | hl/degrees Plato |
| <= 12500 hl | 1.74 | hl/degrees Plato |
| <= 25000 hl | 1.80 | hl/degrees Plato |
| <= 50000 hl | 1.86 | hl/degrees Plato |
| <= 75000 hl | 1.92 | hl/degrees Plato |
| <= 200000 hl | 1.98 | hl/degrees Plato |
| Wine | ||
| Standard rate | 74.9 | hectolitre |
| Sparkling wine | 256.3 | hectolitre |
| < 8.5% vol. | 23.9 | hectolitre |
| Other fermented beverages | ||
| Still | 74.9 | hectolitre |
| Sparkling | 256.3 | hectolitre |
| < 8.5% vol. | 23.9 | hectolitre |
| Intermediate products | ||
| Standard rate | 157.8 | hectolitre |
| Std. rate (sparkling) | 256.1 | hectolitre |
| < 15% vol. | 118.6 | hectolitre |
| < 15% vol. (sparkling) | 256.1 | hectolitre |
| Ethyl alcohol | 2992.8 | hectolitre p.a. |
14.3.1 Non-alcoholic beverages
A number of non-alcoholic beverages are subject to excises as well, but this group only represents a very small share of total excise revenues (less than 1%). Coffee products are the most important among them. These are summarized in Table 14.4.
| Non-alcoholic beverage | 2019 | unit |
|---|---|---|
| Non-roasted coffee | 0.2001 | kg |
| Roasted coffee | 0.2502 | kg |
| Extracts, essences & concentrates of coffee | 0.7004 | kg |
| Other non-alcoholic beverages | ||
| Rate a | 0.00 | hl |
| Rate b | 6.81 | hl |
| Rate c | 3.75 | hl |
| Rate d | 3.75 | hl |
| Rate e | 3.75 | hl |
| Rate f | 3.75 | hl |
| Rate g | 0.00 | hl |
| Rate h1 | 40.88 | hl |
| Rate h2 | 68.13 | 100 kg |
More recent rates can be found in the Memento Fiscal/Tax Survey (2018: pages 268 to 279).
14.4 Modelling Assumptions
- For excises on alcoholic beverages we only consider discrete categories of degrees Plato. For instance, two types of beers: pilsners (12 °P) and heavy beers (36 °P). And compute the “total excise duty” for each category.
- For excises on tobacco and cigarettes, consider both specific and ad valorem excises.
- For excises on energy products and electricity:
- No need to differentiate the different types of excises (from an economic point of view, this make no difference). Just sum the “total excise duty” for each product.
- A fuel used for heating purposes is not the same good as the same fuel used for transportation purposes! This need to be differentiated.
- The quantity consumed of liquefied hydrocarbons, i.e. butane, propane, etc. is not observed and therefore these goods are omitted from the excise duty calculation.
14.5 Module input
14.5.1 Variables
#> Warning in create_inputvar_table(path_xlsx): Some variables are missing:
#> xadbe_hm_hsm, xadcg_hm_hsm, xadci_hm_hsm, xadna_hm_hsm, xadnb_hm_hsm,
#> xadsp_hm_hsm, xadtp_hm_hsm, xadwi_hm_hsm, xcl_hm_hsm, xco_hm_hsm, xed_hm_hsm,
#> xhlpr_hm_hsm, xhlse_hm_hsm, xhoenel_hm_hsm, xhoenga_hm_hsm, xhoenhe_hm_hsm,
#> xhoenlf_hm_hsm, xhoenlh_hm_hsm, xhoensf_hm_hsm, xhomr_hm_hsm, xhort_hm_hsm,
#> xhows_hm_hsm, xnuco_hm_hsm, xnu_hm_hsm, xnusd_hm_hsm, xotfs_hm_hsm,
#> xotip_hm_hsm, xot_hm_hsm, xre_hm_hsm, xrhac_hm_hsm, xrhca_hm_hsm,
#> xtrfudi_hm_hsm, xtrfuot_hm_hsm, xtrfupe_hm_hsm, xtr_hm_hsm, xtrseif_hm_hsm,
#> xtrseot_hm_hsm, xtrts_hm_hsm, xadbe_hm_hsn, xadci_hm_hsn, xadnb_hm_hsn,
#> xadsp_hm_hsn, xadtp_hm_hsn, xadwi_hm_hsn, xhoenel_hm_hsn, xhoenga_hm_hsn,
#> xhoenlf_hm_hsn, xnuco_hm_hsn, xnusd_hm_hsn, xtrfudi_hm_hsn, xtrfupe_hm_hsn.| Name | Description | Database |
|---|---|---|
| xadbe_hm_hsm | Monthly expenditure on lager beer, other alcoholic beer & beer-based drinks | HBS |
| xadbe_hm_hsn | Monthly expenditure on lager beer, other alcoholic beer & beer-based drinks (quantity) | HBS |
| xadcg_hm_hsm | Monthly expenditure on cigars | HBS |
| xadci_hm_hsm | Monthly expenditure on cigarettes | HBS |
| xadci_hm_hsn | Monthly cigarette consumption (quantity) | HBS |
| xadna_hm_hsm | Monthly expenditure on narcotics | HBS |
| xadnb_hm_hsm | Monthly expenditure on low and non-alcoholic beer | HBS |
| xadnb_hm_hsn | Monthly expenditure on low and non-alcoholic beer (quantity) | HBS |
| xadsp_hm_hsm | Monthly expenditure on spirits | HBS |
| xadsp_hm_hsn | Monthly expenditure on spirits (quantity) | HBS |
| xadtp_hm_hsm | Monthly expenditure on other tobacco products | HBS |
| xadtp_hm_hsn | Monthly consumption of other tobacco products (quantity) | HBS |
| xadwi_hm_hsm | Monthly expenditure on wine | HBS |
| xadwi_hm_hsn | Monthly expenditure on wine (quantity) | HBS |
| xcl_hm_hsm | Monthly expenditure on clothing and footwear | HBS |
| xco_hm_hsm | Monthly expenditure on communication | HBS |
| xed_hm_hsm | Monthly expenditure on education | HBS |
| xhlpr_hm_hsm | Monthly expenditure on medical products, appliances and equipment | HBS |
| xhlse_hm_hsm | Monthly expenditure on out-patient services + hospital services | HBS |
| xhoenel_hm_hsm | Monthly expenditure on electricity (housing) | HBS |
| xhoenel_hm_hsn | Monthly electricity consumption (housing) (quantity) | HBS |
| xhoenga_hm_hsm | Monthly expenditure on natural gas and town gas | HBS |
| xhoenga_hm_hsn | Monthly natural gas and town gas consumption (quantity) | HBS |
| xhoenhe_hm_hsm | Monthly expenditure on heat energy (housing) | HBS |
| xhoenlf_hm_hsm | Monthly expenditure on liquid fuels (housing) | HBS |
| xhoenlf_hm_hsn | Monthly liquid fuel consumption (housing) (quantity) | HBS |
| xhoenlh_hm_hsm | Monthly expenditure on liquefied hydrocarbons, butane, propane, etc. | HBS |
| xhoensf_hm_hsm | Monthly expenditure on solid fuels (housing) | HBS |
| xhomr_hm_hsm | Monthly expenditure on maintenance and repair of the dwelling + miscellaneous services relating to the dwelling | HBS |
| xhort_hm_hsm | Monthly expenditure on actual rentals for housing + imputed rentals for housing | HBS |
| xhows_hm_hsm | Monthly expenditure on water supply (housing) | HBS |
| xnu_hm_hsm | Monthly expenditure on nutrition (food and non alcoholic beverages) | HBS |
| xnuco_hm_hsm | Monthly expenditure on coffee | HBS |
| xnuco_hm_hsn | Monthly expenditure on coffee (quantity) | HBS |
| xnusd_hm_hsm | Monthly expenditure on soft drinks | HBS |
| xnusd_hm_hsn | Monthly expenditure on soft drinks (quantity) | HBS |
| xot_hm_hsm | Monthly expenditure on miscellaneous goods and services | HBS |
| xotfs_hm_hsm | Monthly expenditure on funeral services | HBS |
| xotip_hm_hsm | Monthly expenditure on social protection & insurance & financial services NEC & other services NEC | HBS |
| xre_hm_hsm | Monthly expenditure on recreation and culture | HBS |
| xrhac_hm_hsm | Monthly expenditure on accomodation services | HBS |
| xrhca_hm_hsm | Monthly expenditure on catering services | HBS |
| xtr_hm_hsm | Monthly expenditure on transport | HBS |
| xtrfudi_hm_hsm | Monthly expenditure on diesel | HBS |
| xtrfudi_hm_hsn | Monthly diesel consumption (quantity) | HBS |
| xtrfuot_hm_hsm | Monthly expenditure on other fuels for personal transport equipment + lubricants | HBS |
| xtrfupe_hm_hsm | Monthly expenditure on petrol | HBS |
| xtrfupe_hm_hsn | Monthly petrol consumption (quantity) | HBS |
| xtrseif_hm_hsm | Monthly expenditure on international flights | HBS |
| xtrseot_hm_hsm | Monthly expenditure on other purchased transport services | HBS |
| xtrts_hm_hsm | Monthly expenditure on transport services | HBS |
14.5.2 Parameters
| Name | Description | Value (2020) |
|---|---|---|
| ed_xadbe_hm_hsn | Excise duty / Lager beer, other alcoholic beer & beer-based drinks (per hl-degree Plato of the end product) | 0.220473 |
| ed_xadci_hm_hsn | Excise duty / Cigarettes (per pack of 20 cigarettes) | 1.291982 |
| ed_xadnb_hm_hsn | Excise duty / Low and non-alcoholic beer (per kilogram/litre) | 0.037519 |
| ed_xadsp_hm_hsn | Excise duty / Spirits (per kilogram/litre) | 0.749086 |
| ed_xadtp_hm_hsn | Excise duty / Other tobacco products | 2.117325 |
| ed_xadwi_hm_hsn | Excise duty / Wine (per kilogram/litre) | 0.749086 |
| ed_xhoenel_hm_hsn | Excise duty / Electricity (per KWh) | 0.0019261 |
| ed_xhoenga_hm_hsn | Excise duty / Natural gas and town gas (per KWh) | 0.0009978 |
| ed_xhoenlf_hm_hsn | Excise duty / Liquid fuels (per kilogram/litre) | 0.0172564 |
| ed_xnuco_hm_hsn | Excise duty / Coffee (per kilogram/litre) | 0.2502 |
| ed_xnusd_hm_hsn | Excise duty / Soft drinks (per kilogram/litre) | 0.119233 |
| ed_xtrfudi_hm_hsn | Excise duty / Diesel (per kilogram/litre) | 0.5384522 |
| ed_xtrfupe_hm_hsn | Excise duty / Petrol (per kilogram/litre) | 0.6147543 |
| edave_xadcg_hm_hsm | Excise duty (ad valorem) / Cigars | 0.1 |
| edave_xadci_hm_hsm | Excise duty (ad valorem) / Cigarettes | 0.4004 |
| edave_xadtp_hm_hsm | Excise duty (ad valorem) / Other tobacco products | 0.315 |
| vat_xadbe_hm_hsm | VAT / Lager beer, other alcoholic beer & beer-based drinks | 0.21 |
| vat_xadcg_hm_hsm | VAT / Cigars | 0.21 |
| vat_xadci_hm_hsm | VAT / Cigarettes | 0.21 |
| vat_xadna_hm_hsm | VAT / Narcotics | 0.21 |
| vat_xadnb_hm_hsm | VAT / Low and non-alcoholic beer | 0.21 |
| vat_xadsp_hm_hsm | VAT / Spirits | 0.21 |
| vat_xadtp_hm_hsm | VAT / Other tobacco products | 0.21 |
| vat_xadwi_hm_hsm | VAT / Wine | 0.21 |
| vat_xclcf_hm_hsm | VAT / Clothing and footwear | 0.21 |
| vat_xclrp_hm_hsm | VAT / Repair and hire of clothing + repair and hire of footwear | 0.06 |
| vat_xco_hm_hsm | VAT / Communication | 0.21 |
| vat_xed_hm_hsm | VAT / Education | 0 |
| vat_xhlpr_hm_hsm | VAT / Medical products, appliances and equipment | 0.06 |
| vat_xhlse_hm_hsm | VAT / Out-patient services + hospital services | 0 |
| vat_xhoenel_hm_hsm | VAT / Electricity | 0.21 |
| vat_xhoenga_hm_hsm | VAT / Natural gas and town gas | 0.21 |
| vat_xhoenhe_hm_hsm | VAT / Heat energy | 0.21 |
| vat_xhoenlf_hm_hsm | VAT / Liquid fuels | 0.21 |
| vat_xhoenlh_hm_hsm | VAT / Liquefied_Hydrocarbons-butane-propane-etc | 0.21 |
| vat_xhoensf_hm_hsm | VAT / Solid fuels | 0.12 |
| vat_xhofuma_hm_hsm | VAT / Furnishings, household equipment and routine household maintenance | 0.21 |
| vat_xhomatx_hm_hsm | VAT / Repair of household textiles | 0.06 |
| vat_xhomr_hm_hsm | VAT / Maintenance and repair of the dwelling + miscellaneous services relating to the dwelling | 0.21 |
| vat_xhort_hm_hsm | VAT / Actual rentals for housing + imputed rentals for housing | 0 |
| vat_xhows_hm_hsm | VAT / Water supply | 0.06 |
| vat_xnuco_hm_hsm | VAT / Coffee | 0.06 |
| vat_xnues_hm_hsm | VAT / Food and non-alcoholic beverages | 0.06 |
| vat_xnumg_hm_hsm | VAT / Margarine and other vegetable fats | 0.12 |
| vat_xnusd_hm_hsm | VAT / Soft drinks | 0.06 |
| vat_xotfs_hm_hsm | VAT / Funeral services | 0.06 |
| vat_xotipn_hm_hsm | VAT / Social protection & insurance & financial services NEC & other services NEC | 0 |
| vat_xotpr_hm_hsm | VAT / Miscellaneous goods and services | 0.21 |
| vat_xrepr_hm_hsm | VAT / Recreation and culture | 0.21 |
| vat_xrepubn_hm_hsm | VAT / Books & newspapers and periodicals | 0.06 |
| vat_xrepula_hm_hsm | VAT / Recreational and sporting services & cinemas, theatres, concerts & museums, libraries, zoological gardens | 0.06 |
| vat_xrhac_hm_hsm | VAT / Accommodation services | 0.06 |
| vat_xrhca_hm_hsm | VAT / Catering services | 0.12 |
| vat_xtrfudi_hm_hsm | VAT / Diesel | 0.21 |
| vat_xtrfuot_hm_hsm | VAT / Other fuels for personal transport equipment + lubricants | 0.21 |
| vat_xtrfupe_hm_hsm | VAT / Petrol | 0.21 |
| vat_xtrpr_hm_hsm | VAT / Transport | 0.21 |
| vat_xtrseif_hm_hsm | VAT / International flights | 0 |
| vat_xtrseot_hm_hsm | VAT / Other purchased transport services | 0.21 |
| vat_xtrsets_hm_hsm | VAT / Transport services | 0.06 |
14.6 Module output
| Name | Description |
|---|---|
| vat | amount of vat paid per household |
| ed | amount of excise duties paid per household |
| edave | amount of ad valorem excise duties paid per household |
14.7 References
[] Arrêté royal 20 du 20 juillet 1970 fixant le taux de la taxe sur la valeur ajoutée et déterminant la répartition des biens et services selon ces taux. Wolters Kluwer Belgium S.A., 2017. URL: [http://japanologie.arts.kuleuven.be/sites/default/files/uploads/bijlagen/tva-6-pc
[] Tax Survey 2018. Federal Public Service Finance, 2018. URL: https://finance.belgium.be/sites/default/files/Statistieken_SD/FM_MF_TS_StM/TS2018_V01_entire.pdf.
[] TVA. TARBEL, 2020. URL: https://eservices.minfin.fgov.be/extTariffBrowser/FileResourceForHomePageServlet?fname=TVA_FR.pdf&lang=FR.
[] COUNTRY REPORT: BELGIUM. URL: https://www.iser.essex.ac.uk/files/projects/Euromod/IndirectTaxCountryReport_BE.pdf.
Except for tobacco and cigarettes that are subject to “ad valorem” excises (defined as a percentage of the retail price) in addition to specific excises (per quantity unit).↩︎