Circular 2024/C/77 on employer reimbursement of electricity costs for charging a company car at home
This circular discusses the tax treatment of reimbursement of electricity costs by the employer for charging a company car at home.
personal income tax ; benefit in kind ; free disposal of a car vehicle ; electric vehicle ; electric vehicle charging station ; free provision of electricity
FPS Finance, 05.12.2024
General Administration of Taxation - Personal income tax
Table of contents
II. Reimbursement of electricity costs by the employer for charging a company car at home
2. Provision of a charging station
3. Specific communication system
4. Reimbursement based on actual electricity costs
C. Reimbursement of charging costs at public charging stations.
III. Transfer of ownership of the charging station
V. Entry into force - out of force
I. Introduction
1. This Circular discusses on behalf of the employee the tax treatment of the electricity costs reimbursed by the employer for recharging at home an electric or plug-in hybrid vehicle (1) (hereafter company vehicle) provided.
(1) A vehicle referred to in Art. 65 of the Income Tax Code 1992 (CIR 92), namely, vehicles other than those used exclusively for paid transport of persons:
-passenger cars
-cars for dual use
-minibuses
-including light trucks referred to in art. 4, § 3, of the Code of taxes assimilated to income taxes, namely the vehicles approved by the vehicle registration service of the FPS Mobility and Transport (DIV) in the category of 'light trucks', but which are classified for tax purposes (and in particular for traffic tax purposes) as passenger cars, dual-use cars or minibuses (so-called 'false' light trucks).
2. Indeed, at the tax level, there is a distinction between:
- on the one hand, a free provision of electricity
- and, on the other hand, a reimbursement of electricity costs.
3. In the case of a free provision of electricity, that electricity is billed in the name of the employer and the related costs are paid directly by the employer to the energy supplier.
4. Examples include:
- The free provision of a charging card from the employer that allows the employee to charge his company vehicle at a public charging station.
- The possibility for the employee to charge his company car free of charge on the employer's premises.
- The installation of an additional electricity meter at the employee's home for charging the company car for which the employer concludes a separate energy contract with an energy supplier.
5. When the employer provides a company car and the applicable car policy also provides for the provision of electricity free of charge, in that case only one benefit in kind will be taxed on behalf of the employee, namely the benefit in kind estimated at a flat rate in accordance with Article 36, § 2, ITC 92, for the personal use of a vehicle provided free of charge. In this case, the provision of electricity free of charge does not give rise to an additional taxable benefit in kind, but is included in the lump-sum estimated benefit in kind.
6. When electricity is reimbursed, that electricity is billed in the employee's name and the associated costs are paid by the employee directly to the energy supplier. The employer then reimburses all or part of these costs to the employee.
7. A reimbursement of electricity costs by the employer for charging a provided company car at home, even if that principle is included in the car policy, is not part of the lump sum estimated benefit in kind for the personal use of that vehicle (2), but constitutes a separate benefit. Indeed, it is not a provision of electricity by the employer, but rather a reimbursement of electricity costs.
(2) As referred to in Article 36, § 2, CIR 92.
8. The following is the tax treatment of the reimbursement of electricity costs by the employer for charging the company car at home on behalf of the employee. This tax treatment applies mutatis mutandis on the part of a company manager.
II. Reimbursement of electricity costs by the employer for charging a company car at home
A. Principle
9. The tax treatment of reimbursement of electricity costs by the employer for charging the company car at home should be differentiated according to the nature of the trip.
10. Reimbursement of electricity related to professional travel constitutes a nontaxable reimbursement of the employer's own expenses (3) insofar as the employer provides double proof that:
- that reimbursement is intended to cover expenses that are its own
- and that such reimbursement was actually spent on such expenses.
(3) Within the meaning of article 31, second paragraph, 1°, in fine, CIR 92.
11. Reimbursement of electricity related to commuting makes up an allowance granted by the employer as reimbursement of travel expenses between the place of residence and the place of employment. This reimbursement constitutes a taxable benefit in kind (4) with the employee for the amount actually paid. Indeed, it is not the provision of electricity, but rather the reimbursement of personal electricity costs (private expense). For the employee whose professional expenses are determined on a flat-rate basis (5), such reimbursements can be exempt for tax year 2025 for a maximum amount of 490 euros per year (6).
(4) Within the meaning of art. 31, second paragraph, 2°, CIR 92.
(5) In accordance with art. 51, CIR 92.
(6) Application of art. 38, § 1, first paragraph, 9°, c, CIR 92 - basic amount 250 euros.
12. The reimbursement of electricity related to the actual private trips shall constitute a taxable benefit in kind (7) with the employee for the amount actually paid.
(7) Within the meaning of article 31, second paragraph, 2°, CIR 92.
B. Exception
13. In order to support the greening of the car fleet, a derogation to the foregoing basic principle is granted for home charging, but under certain conditions that must allow to exclude possible abuses.
1. Conditions
14. In this regard, in the context of Parliamentary Question No. 472, asked on 01.06.2021 by People's Deputy Joris Vandenbroucke, the Minister replied as follows.
When an employer:
-in addition to an electric company car, also provides his employee with a home charger or an electric charging station;
-which has a specific communication system that communicates to the employer how much electricity is consumed;
-and the applicable car policy also provides for the reimbursement of the electricity "refilled" with the home charger;
then my administration accepts that the provision of the electric company car with charging station and the reimbursement by the employer of the electricity refuelled using that charging station is treated for tax purposes in the same way as the provision of a company car with accompanying fuel card.
In that case, only one benefit in kind will be taxed, namely the flat-rate estimated benefit in kind applicable to the electric company car. The reimbursement of the electricity in these circumstances does not create an additional taxable benefit, provided, of course, that this reimbursement relates exclusively to the electricity refuelled for the electric company car provided.
The reimbursement by the employer must be based on the employee's actual electricity costs. For this purpose, all means of proof of common law, except the oath, are permitted (8).
(8) QRVA 55/060, dated 24.07.2021, pp. 159-161.
2. Provision of a charging station
15. However, the provision by the employer of a home charger or an electric charging station (hereinafter referred to as charging station) is not an absolute condition for the application of the exception mentioned in No. 14.
16. It is true that if the employer makes a charging station available, this charging station does not constitute anoption or accessory that increases the list value of the company car and consequently the taxable benefit in kind for the personal use of the company car (see, however, nos. 37 and 38).
17. The employee may therefore just as easily use a charging station of which he is the owner (possibly pursuant to a transfer of ownership at the end of the employer's lease contract). The condition is then that the own charging station has a specific communication system that communicates to the employer how much electricity is consumed for charging the company car provided by him at home. This may just as well be done indirectly through the intervention of a leasing company or a charge point operator (CPO).
18. When several family members have an electric company car at their disposal, they may use the same charging station (e.g. the charging station provided by the employer of one of the family members) provided that the charging costs of each company car can be determined separately in a verifiable manner. Indeed, the reimbursement by the employer may only relate to the charging costs of the electric company car provided by it (9).
(9) See Minister's answer to parliamentary question No. 1210, asked on 28.10.2022 by MP Jef Van den Bergh, QRVA 55/099, dated 16.12.2022, pp. 144-145.
3. Specific communication system
19. Because the employer must ensure that the reimbursement may only relate to the electricity consumed at home for charging the company car provided by him, there is the requirement that the charging station must have a specific communication system that communicates to the employer the electricity consumption for charging the company car. Indeed, the employer must have a view of that consumption.
20. Other forms of communication may also be accepted for this purpose, provided, of course, that they are verifiable. For example, an intermediate counter may also be a possibility (10).
(10) See Minister's answer to parliamentary question No. 24138, asked by People's Deputy Joy Donné, CRIV 55 COM 701, pp. 31-32.
21. Regarding the measurement of the amount of electricity consumed, it is required that each new system purchased, leased or rented from 01.01.2025 onwards, for reimbursements of electricity costs related to the period from 01.01.2025 onwards, must have a kWh measurement that meets the conditions in terms of accuracy as imposed in the inspection protocol when the accuracy is limited to 2% on the measurement or meets accuracy class B according to the Royal Decree of 15.04.2016 (11) or an equivalent class according to another standard.
(11) Royal Decree of 15.04.2016 on measuring instruments (B.S. 20.04.2016 - Numac: 2016011152).
4. Reimbursement based on actual electricity costs
22. Reimbursement by the employer must be based on the employee's actual electricity costs, which must be proven. For this purpose, all means of proof of common law, except the oath, are permitted.
23. However, an exact calculation of those actual electricity costs is not always obvious. Indeed, there are many parameters (12) that must be taken into account to calculate the actual electricity cost per employee and per recharge. This can result in a significant administrative burden for both the employee and the employer.
(12) Day and night tariff, fixed, variable or dynamic energy contract, contract change(s) throughout the year, electricity through solar panels, home battery, capacity tariff.
24. To accommodate this, it is accepted that a fixed amount per kWh may be used to calculate the actual electricity costs, but only on the condition that this fixed amount per kWh does not exceed the CREG rate mentioned below.
25. Of course, this still implies that the employer must know the exact electricity consumption for charging the company car at home per employee.
a. CREG tariff
26. The maximum fixed amount per kWh is determined for each quarter concerned per region on the basis of the employee's place of residence (13). This means that a maximum fixed amount per kWh is determined only 4 times per region in a calendar year. This amount is determined as follows.
(13) See No. 29 below.
27. First, the fixed amount per kWh for a month concerned is determined on the basis of the average commercial electricity price all-in (14) on the retail market for residential customers with a household with a digital meter, an electric vehicle, consumption of 8,000 kWh/year and average monthly peak of 7.36 kW, as published by the CREG in its on-board table on its website for that month concerned.
(14) The all-in price includes the following components: the price for the energy, the network costs (transmission/transport and distribution), the levies and surcharges and VAT.
28. On this basis, the maximum fixed amount per kWh for the quarter in question is then determined as follows:
- the fixed amounts per kWh of August, September and October of year N-1 shall be the basis for calculating the maximum fixed amount per kWh for the reimbursement of electricity consumed during the first quarter of year N
- the fixed amounts per kWh of November and December of year N-1 and January of year N constitute the basis for the calculation of the maximum fixed amount per kWh for the refund of electricity consumed during the second quarter of year N
- the fixed amounts per kWh of February, March and April of year N constitute the basis for the calculation of the maximum fixed amount per kWh for the refund of electricity consumed during the third quarter of year N
- the fixed amounts per kWh of May, June and July of year N form the basis for the calculation of the maximum fixed amount per kWh for the refund of the electricity consumed during the fourth quarter of year N.
29. The employer reimburses the electricity consumed, without exceeding the maximum fixed amount per kWh as established above, taking into account the region of the employee's residence (15). The employer may also choose to reimburse electricity consumed without taking into account the residence of its employees. In such a case, the maximum fixed rate per kWh, as defined above, is equal to the lowest rate applicable in one of the regions for the quarter in question. This choice applies to the entire calendar year.
(15) The employer may, of course, reimburse less.
30. The quarterly amount used allows to smooth out large fluctuations, as is currently done in the context of determining the flat-rate mileage reimbursement for service travel (16), and to avoid having to update the payroll systems every month.
(16) See Circular 2022/C/121 of 22.12.2022.
b. Publication maximum flat rate per kWh
31. For the first quarter of 2025, the maximum fixed rate per kWh is:
- Flemish Region: 28.22 eurocent/kWh
- Brussels-Capital Region: 32.94 eurocent/kWh
- Walloon Region: 32.56 eurocent/kWh
32. For the following quarters, the Administration will publish the maximum fixed rate per kWh by means of an addendum to this circular.
c. Limited in time
33. The administrative tolerance to calculate actual electricity costs based on a maximum flat rate per kWh is only applicable for a limited period of time.
34. This is, after all, a tolerance on a tolerance (17). Moreover, this administrative tolerance should not prevent the transition to more performant systems to provide or reimburse electricity in the context of charging a company car at home in the near future. Therefore, this tolerance will only apply until 31.12.2025. Thereafter, taking into account the systems that will be available at that time, the administration will evaluate whether or not an extension of that administrative tolerance is necessary.
(17) Namely, the tolerance that, under certain conditions, a reimbursement by the employer of actual electricity costs for recharging the company car at home can also be accepted, when in fact it should be a provision of electricity by the employer (billing in the name of the employer) for recharging the company car at home, because only the latter situation is comparable to the provision of a company car (fossil fuel) with accompanying fuel card and for which the same tax treatment is therefore justified.
C. Refunds of charging costs at public charging stations
35. However, the exception discussed in nos. 13 to 34 does not apply to reimbursements of electricity costs by the employer for charging the company car at a public charging station.
36. When an employee charges his company car at a public charging station and the employer reimburses that electricity cost, the tax treatment as discussed in Nos. 9 to 12 applies.
III. Transfer of ownership of the charging station
37. When an employer, in addition to a company car, also provides its employee with a charging station that it has installed at the employee's home, and at the end of that provision, ownership of that charging station is transferred to the employee free of charge, then that transfer of ownership in principle gives rise to taxation of a benefit in kind on the part of the employee.
38. That benefit applies to the employee for the actual value. However, what the residual value of the charge post is for the employee at the time of the transfer of ownership is a question of fact, and must therefore be assessed on a case-by-case basis.
IV. Own car
39. When an employer reimburses the electricity costs for charging the employee's own car at home, the tax treatment as discussed in nos. 9 to 12 applies.
V. Entry into force - out of force
40. The aforementioned administrative tolerance to calculate the actual electricity costs on the basis of a maximum fixed amount per kWh shall enter into force as of 01.01.2025 and shall cease to enter into force as of 01.01.2026 (18), and shall apply to electricity costs relating to the period from 01.01.2025 to 31.12.2025. Thus, electricity costs relating to the period from 01.01.2025 to 31.12.2025, which are reimbursed after this period, are also eligible for this administrative tolerance.
(18) Except when the administration would consider that an extension of this administrative tolerance is necessary - see No. 34.
VI. Refunds before 01.01.2025.
41. The administration will assess refunds of electricity costs relating to the period before 01.01.2025 with a certain degree of flexibility when such refunds have been made in good faith using the CREG board table (19).
(19) In accordance with the Minister's answer to parliamentary question No. 33, asked by People's Deputy Steven Coenegrachts, CRIV 56 PLEN 006, pp. 8-9.
Internal ref.: 742.989