Electric company car charging at home: tax-free reimbursement based on a specific CREG tariff

Author Elien De Clercq  (Legal Expert)
Read time 3min
Last updated 02/10/2024 - 10:07

The Minister of Finance recently clarified that the reimbursement of electricity costs for charging an electric company car at home may be based on a specific CREG tariff. This will eliminate the current uncertainty surrounding the issue. 

General rule

When an employer provides an electric company car to an employee and reimburses the electricity costs for home charging, no additional taxable benefit needs to be declared for this reimbursement if the following three conditions are met:

  • the home charger or charging station must have a system that records and reports the amount of electricity used for charging the company car
  • the company's car policy must provide for the reimbursement of electricity charged via the home charger
  • the reimbursement must be based on the employee's actual electricity costs.

If these conditions are met, the reimbursement of electricity costs will be tax-free and form part of the benefit of any kind of the company car (similar to a fuel card for petrol or diesel company cars). 

Practical challenges for employers

The last condition, i.e. reimbursement based on actual electricity costs, presents certain practical challenges. How can an employer determine each employee's actual electricity costs? 

Electricity costs vary depending on factors such as place of residence, time of consumption, type of tariff (fixed, variable or dynamic) and whether the employee has solar panels.

Employers must determine how much each employee pays for electricity and reimburse the actual cost accordingly, which can lead to an administrative nightmare for many employers.

In practice, employers therefore often use the regional CREG tariff (or VREG tariff in Flanders) to reimburse electricity costs. While using a flat rate avoids administrative burdens, it also carries the risk of additional taxes if the reimbursement does not reflect the actual costs. 

Use of a specific CREG tariff as a temporary solution

Finance Minister Vincent Van Peteghem has now clarified that a circular is being drafted and that the Tax Administration will temporarily accept a specific CREG tariff. By introducing a specific CREG tariff, the minister aims to eliminate the current uncertainty among employers and employees, while easing the administrative burden. 

However, this is a temporary solution. Reimbursement based on actual costs remains the general principle. Once technological developments allow (e.g. the use of a submeter with a separate electricity contract), the minister intends to revert to reimbursement based on actual costs.

A step in the right direction

As early as 2022, it was announced that a tax circular would clarify the conditions for tax-free reimbursement of electric company car charging at home. Minister Van Peteghem has confirmed that this circular is finally on its way and will address all concerns. However, it remains to be seen whether the circular will deliver on this promise. 

The recent confirmation that a specific electricity tariff may be used temporarily is, at least, a step in the right direction towards easing administrative burdens for employers.

It remains unclear whether the National Social Security Office will adopt the minister's position. As soon as more information becomes available or the circular is published, we will provide you with an update.

Source: Chamber, Summary report plenary session, CRABV 56 of 26 September 2024, pages 8 and 9; various media.

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