The greening of company car fleets presents new tax challenges. One recurring issue is the reimbursement of costs for home charging of electric company cars. Until now, the tax authorities have held that such reimbursements should, among other things, be made based on the ‘actual’ electricity costs, a method that in practice is not always easy to apply.

After outgoing Minister of Finance Van Peteghem recognised the complexity and the associated administrative burden, the tax authorities have now provided a pragmatic solution through the recently published circular 2024/C/77. The circular clarifies that the tax authorities (temporarily) accept the reimbursement of home electricity used for charging company cars based on a 'fixed amount per kWh’, with a maximum set by a specific rate determined by the CREG. This measure simplifies the administrative burden for both employers and employees and provides more clarity in a rapidly evolving fiscal context.

In this article, we discuss the key aspects of the circular and its implications for employers and employees.
 

Provision of Electrivity vs. Reimbursement For Home Charging of Electric Company Cars

In line with the tax treatment of fuel cards, the (cost-free) provision of electricity by the employer (invoices in the name of the employer) will be part of the forfaitary assessed benefit in kind (BIK) for 'personal use of the company car’, provided that the ‘car policy’ includes such provision.
For example: provision of a charging card; installation of an additional electricity meter at home, for which a separate energy contract is concluded by the employer.

The circular emphasises that this situation must be clearly distinguished from the reimbursement of electricity costs (invoices in the name of the employee) by the employer, where the tax treatment will generally depend on the nature of the travel:

  1. Business travel: tax-free reimbursement for 'costs related to the employer's business';
  2.  Commuting travel: commuting allowance (tax-free up to a certain maximum for employees using the forfaitary professional expenses, otherwise taxable);
  3. Private travel: taxable BIK.

As an exception, administrative tolerance (under cumulative conditions) allows tax-free reimbursement of the 'actual' electricity costs for home charging of the company car (for both employees and directors).

 

Administrative Tolerance for Reimbursement of Actual Electricity Costs for Home Charging of The company Car

Conditions (cumulative)

  • Provision of a home charger/charging station or an employee's own charging station;
  • Specific communication system to accurately measure electricity consumption when charging the company car;
  • The reimbursement is explicitly included in the ‘car policy’;
  • The reimbursement is based on the ‘actual’ electricity costs (tolerance for 2025).

 

Specific communication system (measuring electricity consumed with the company car)

For newly purchased, rented, or leased communication systems as of 1 January 2025, specific accuracy requirements will be imposed for reimbursements related to electricity costs incurred from the same date.

 

Temporary scheme for the calculation of ‘actual’ electricity costs

From 1 January 2025 to 31 December 2025 (extendable), a temporary scheme will be in place for calculating the actual electricity costs, where reimbursement can be temporarily based on a specific (maximum) forfaitary rate (on a quarterly basis). This forfaitary rate is based on the CREG tariffs for the months preceding the relevant quarter.

The tax authorities will publish the 'maximum fixed rate per kWh’ (per region) based on the CREG tariffs on a quarterly basis. For the first quarter of 2025, the ‘maximum fixed rates per kWh’ (per region), based on the CREG tariffs (per region) for the months of August, September, and October 2024, are as follows:    

  • Flemish Region: 28.22 eurocents/kWh
  • Brussels Capital Region: 32,94 eurocents/kWh
  • Walloon Region: 32,56 eurocents/kWh

This specific arrangement is time-limited and will apply to electricity costs related to the (extendable) period from 1 January 2025 to 31 December 2025. For reimbursements of electricity costs related to the period before 1 January 2025, the tax authorities will also take a flexible approach.
 

Situations Excluded From Administrative Tolerance

  • Reimbursements for charging at public charging stations;
  • Reimbursement of electricity costs for home charging of the employee’s own vehicle.

 

Conclusion

Circular 2024/C/77 provides much-needed clarity and a (temporary) practical solution for the fiscal treatment of home charging costs for electric company cars. The temporary scheme simplifies compliance for employers with the administrative tolerance conditions without heavy administrative burdens. Employers should ensure that their car policy is adjusted in a timely manner to fully take advantage of the available fiscal opportunities.

If you have any questions regarding this topic, don’t hesitate to contact our RSM Belgium | Tax team ([email protected]). 
 

 

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