Reimbursement of electricity costs by the employer for charging a company car at home

Author Isabelle Caluwaerts  (Legal Expert)
Read time 12min
Last updated 16/01/2025 - 15:03

In a recent circular letter, the tax authorities have commented on the tax treatment of electricity costs reimbursed by the employer to the employee for home charging an electric or plug-in hybrid vehicle provided by the company.

Electricity provision and reimbursement of electricity

From a tax point of view, there is a distinction between a free provision of electricity on the one hand and a reimbursement of electricity costs on the other.

For a free electricity provision, the electricity is invoiced on behalf of the employer and the related costs are directly paid by the employer to the energy supplier (e.g. free provision of a card with which the employee can charge his company car at a public charging point, charging for free at the office, installing an additional electricity meter at the employee's home to charge the company car for which the employer has entered into a separate energy contract with an energy supplier, etc.).

When the employer provides a company car and when the applicable car policy also allows for the free electricity provision, only one benefit of any kind will be taxed for the employee in that case, that is the benefit of any kind regarding the provision of a company vehicle. So, no additional taxable benefit of any kind arises from the free provision of electricity that is included in the flat-rate assessment of the benefit of any kind.

In case of reimbursement of electricity, it is invoiced on behalf of the employee and the related costs are directly paid by the employee to the energy supplier. The employer then reimburses all or part of these costs to the employee.

Even if this principle is included in the car policy, the reimbursement of electricity costs by the employer for charging a company car at home is not part of the flat-rate assessment of the benefit of any kind for the personal use of this vehicle, but constitutes a separate benefit. As a matter of fact, it is not the employer that supplies the electricity in this case, but it is rather a reimbursement of electricity costs.

A tax circular letter of 5 December 2024 comments on the tax treatment for the employee of the reimbursement of electricity costs by the employer for charging the company car at home. This tax treatment also applies to company directors.

Reimbursement of electricity costs: a reminder of the principles

For the tax treatment of the reimbursement of electricity costs by the employer for charging the company car at home, a distinction must be made according to the type of travel.

The reimbursement of electricity used for business travel is a tax-free reimbursement of expenses specific to the employer when the employer can prove that the allowance is intended to cover expenses which are specific to him and that the allowance has actually been spent on such expenses.

The reimbursement of electricity used for home-to-work travel is an allowance paid by the employer to cover the travel expenses between home and work. 

The reimbursement of electricity used for private travel itself forms a taxable benefit of any kind for the employee for the amount actually paid.

Exception

In order to encourage the greening of the car fleet, a derogation from the aforementioned basic principles is granted for charging at home, subject however to some conditions intended to prevent any abuses.

Conditions

When an employer:

- in addition to an electric company car, also provides its employees with a home charger or an electric charging station;

- which has a specific communication system that notifies the employer how much electricity is being consumed;

- and if the applicable car policy also provides for the reimbursement of the electricity charged with the home charger.

The tax administration therefore accepts that the provision of an electric company car with a charging station and the reimbursement by the employer of the electricity charged with this charging station should be treated for tax purposes in the same way as the provision of a company car with an associated fuel card.

In this case, only one benefit of any kind is taxed, that is the benefit of any kind assessed on a flat-rate basis applicable to the electric company car. In these circumstances, no additional taxable benefit arises from the reimbursement of electricity as long as the reimbursement only relates to the electricity charged for the provided electric company car.

The reimbursement by the employer must be based on the employee's actual electricity costs. All means of proof under ordinary law are admitted for this purpose, apart from oath.

Provision of a charging station

However, the provision by the employer of a home charger or an electric charging station is not an absolute requirement for the application of the exception.

In this context, the employee may just as well use a charging station that he or she owns (possibly, for example, as a result of a transfer of ownership after the end date of the employer's leasing contract). However, the requirement is that the private charging station has a specific communication system that notifies the employer how much electricity is being consumed for charging the provided company car at home. 

Where several members of a household have an electric company car, they may use the same charging station (for example the charging station provided by the employer of one of the members of the household) provided that the charging costs of each company car can be determined separately in a verifiable way. 

Specific communication system

Since the employer must ensure that the reimbursement may only relate to the electricity used at home to charge the provided company car, the charging station must be equipped with a specific communication system that notifies the employer of the electricity consumption to charge the company car. 

Various forms of communication can be accepted, as long as they are verifiable of course (an intermediate meter for example).

As far as the measurement of the electricity consumption is concerned, all newly purchased, leased or rented systems from 1 January 2025 will be required to have an electricity meter that meets the accuracy requirements set out in the circular letter for reimbursement of electricity costs relating to the period starting on 1 January 2025.

Reimbursement based on actual electricity costs

The reimbursement by the employer must be based on the employee's actual electricity costs that have to be proved. All means of proof under ordinary law are admitted for this purpose, apart from oath.

However, it's not always easy to calculate these actual electricity costs accurately. As a matter of fact, a number of settings (day rate and night rate, fixed, variable or dynamic energy contract, change(s) of contract(s) during the year, electricity from solar panels, domestic battery, capacity rate, etc.) must be taken into account in order to calculate the actual electricity costs per employee and per charging session. This can lead to a significant administrative burden for both employee and employer.

To remedy this situation, it is accepted that a fixed amount per kWh can be used to calculate the actual electricity costs, but only if this fixed amount per kWh does not exceed the CREG rate mentioned in the circular letter.

CREG rate

For each quarter concerned, the maximum fixed amount per kWh is determined by Region according to the employee's place of residence. This means that a maximum fixed amount per kWh is determined only four times per calendar year and per Region. The circular letter specifies how this amount is set.

The employer may therefore reimburse the used electricity without exceeding the maximum fixed amount per kWh, while taking into account the Region in which the employee's place of residence is located (the employer may, of course, reimburse a lower amount). 

The employer may also decide not to take its employees' place of residence into account for the reimbursement of the used electricity. In this case, the maximum fixed amount per kWh is equal to the lowest rate applicable in one of the Regions for the concerned quarter. This choice then applies to the whole calendar year.

Publication of the maximum fixed amount per kWh

For the first quarter of 2025, the maximum fixed amount per kWh is:

Flemish Region: 28.22 euro cents/kWh

Brussels-Capital Region: 32.94 euro cents/kWh

Walloon Region: 32.56 euro cents/kWh

For the following quarters, the administration will publish the maximum fixed amount per kWh in an addendum to the circular letter.

Reimbursement of charging costs at public charging stations

The exception described above does not apply to reimbursements of electricity costs by the employer for charging the company car at a public charging station.

When an employee charges his or her company car at a public charging station and when the employer reimburses him or her the electricity costs, the aforementioned general principles ("Reminder of the principles") then apply.

Transfer of ownership of the charging station

When an employer provides, in addition to a company car, a charging station which he has had installed at the employee's home and when, at the end of this provision, the ownership of this charging station is transferred free of charge to the employee, this transfer of ownership gives then rise, in principle, to the taxation of a benefit of any kind for the employee.

This benefit counts for its actual value for the employee. The value of this charging station for the employee at the time of transfer of ownership is a matter of fact and must therefore be assessed on a case-by-case basis.

Private car

When an employer reimburses the electricity costs for charging the employee's private car at home, the aforementioned general principles ("Reminder of the principles") then apply.

Entry into force – End date 

The aforementioned administrative tolerance authorising the calculation of actual electricity costs on the basis of a maximum fixed amount per kWh takes effect from 1 January 2025 and ends to apply from 1 January 2026 and applies to electricity costs relating to the period from 1 January 2025 to 31 December 2025 inclusive. Therefore, the electricity costs related to this period that are reimbursed after this period also benefit from this administrative tolerance.

Depending on the systems that will be available at that time, the administration will then assess whether or not it is required to extend this administrative tolerance.

Reimbursements before 1 January 2025

The tax authorities have announced that they will assess reimbursements of electricity costs related to the period prior to 1 January 2025 with a certain leniency, when these reimbursements have been carried out in good faith using the CREG dashboard. 

And what about the social security level?

If the employer provides the employee with an electric or plug-in hybrid vehicle, the reimbursement of the charging cost of the vehicle is not considered as a remuneration subject to NSSO contributions. Of course, this reimbursement only applies to the electricity used to charge the company car.

For the reimbursement of electricity costs for the home charging of a company car, the NSSO has aligned its instructions with the tax circular letter.

 

Source: Circular 2024/C/77 of 5 December 2024 on the reimbursement of electricity costs by the employer for charging a company car at home; NSSO intermediate instructions of 9 January 2025.

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