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Belgium sugary drinks levy to fund labour tax cuts

  • Oct 15, 2015 | Richard Asquith

Belgium sugary drinks levy to fund labour tax cuts

The new Belgian budgets for 2015 and 2016 introduces a tax shift from labour to consumer taxes, including a new tax on high sugar content drinks and other fattening products.

Belgian has almost the highest employer tax rates in Europe:

The new budgets will cut the employer job taxes from 33% to 25%. Small enterprises with more than 5 employees will also enjoy a social security holiday on the sixth employees. The self-employed will see a cut in contributions from 22% to 20.5%.

New VAT rises

To fund the above cuts, there will be a rise in the VAT rate on domestic electricity supplies from 6% to 21%. Belgium will also introduce a tax on sugary drinks from 1 January 2016. This levy may be introduced to other fattening foods at a later date.

EC calls for less employment taxes and more VAT

A report published in September by the European Commission recommended that all EU countries review their tax regimes on employment. It highlighted that Europe has some of the highest employer taxes – known as the ‘tax wedge’ - in the developed world. The Eurozone countries were identified has charging the highest burden on employers. The Commission recommended that more countries shift taxes away from job-creating companies onto consumption, including extending the VAT base and cutting down on the use of reduced VAT rates.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara