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The Belgian VAT Administration provides specific VAT rules regarding the deduction of VAT on charging stations and electric vehicles.
Background
In December 2021, the VAT Circular 2021/C/113 was published, providing further clarification on the scope of the right to deduct VAT levied on the supply of electricity through charging stations and charging points.
Recently, the use of electric vehicles has increased significantly, and businesses are often confronted with complex invoices and various billing flows in this regard.
Given the expected complete shift to electric vehicle fleets from 1 January 2026 (the date when tax deductions for the purchase of fossil fuel and hybrid vehicles will be reduced to zero), this VAT issue will only become more important. Charging stations and electric vehicles are becoming a vital cost factor that requires special attention from both a tax and VAT perspective.
Considerations
It is essential for businesses to thoroughly prepare for this new situation. Such an analysis goes beyond a simple cost check; it requires a deep understanding of VAT legislation and the associated tax implications.
There are numerous important considerations for companies:
- Purchase and installation of charge points: should this be done at the company’s premises or at the employee’s home? What VAT rate applies, and how should VAT be deducted?
- Relocation or departure of an employee: what happens to the charge point or station?
- Upgrade of electrical installations: who bears the cost if the employee’s installation needs to be upgraded?
- Employer-employee agreements: what rules should be established regarding the use of charge points?
- Private charging at workstations: what about VAT deduction and cost allocation?
- VAT deduction for public charge points: what if electricity is purchased from public charging stations in Belgium or abroad?
- Management and VAT deduction for charge cards and equipment: how can VAT be reclaimed on costs such as charge cards and consumption metering?
- VAT deduction for green energy production: what about solar panels and wind turbines supplying energy for electric company vehicles?
- Electricity reimbursement to employees: how can this be organised without making the employee liable for VAT on the supply of electricity?
- Leasing of company cars and installation of charge points: what are the tax and VAT implications if the lease contract includes a charge point?
- Social impact of providing an electric car to an employee: when is a CO² contribution due?
These topics continue to create uncertainty for businesses due to the wide variety of solutions currently available on the market, each with different VAT and tax implications. Applying the correct regulations is therefore often complex.
If you would like more information or need assistance regarding VAT, do not hesitate to reach out to our RSM Belgium VAT team ([email protected]).
