Taxation of reimbursed electricity costs of charging company cars at home clarified

The Belgian Ministry of Finance on 5 December 2024 published circular letter 2024/C/77 (Dutch | French) clarifying the tax treatment applicable to the reimbursement by employers of electricity costs incurred by employees and company directors for home charging of electric or plug-in hybrid company cars.

General tax principles

The circular letter (re)confirms the general tax principles relating to the two possible methods for employers to provide financial support to employees for the costs of charging company cars, i.e., the free provision of electricity and the reimbursement of electricity costs.

Free provision of electricity

The free provision of electricity by the employer—where the electricity costs are invoiced directly to and paid by the employer—is considered as included in the taxable benefit in kind of the company car that is put at the disposal of the employee. No additional benefit arises for tax purposes. Examples include a charging pass provided the employer, charging facilities at an office, or a submeter at the employee’s residence for which the employer concludes a separate energy contract
This option is not limited in time by the circular letter.

Reimbursement of electricity costs

When the electricity costs related to charging a company car are initially invoiced to the employee and then reimbursed by the employer, this is in principle considered as a separate taxable benefit (except for reimbursements linked to professional travel).

The circular letter now provides for a tolerance related specifically to the reimbursement of electricity costs related to home charging. In the case of the reimbursement of other charging costs, the reimbursement will still be considered as a taxable benefit, other than in the context of professional travel (e.g., the reimbursement of public charging costs via employees’ expense claims).

Administrative tolerance on the reimbursement of electricity costs related to home charging

The circular letter both (re)confirms the initial tolerance which determined under which conditions no additional benefit in kind would arise for the reimbursement of electricity costs related to home charging and adds a new (temporary) tolerance on the determination of those costs.

Tolerance I: Conditions for the reimbursement of electricity costs related to home charging

No additional benefit arises from the reimbursement of electricity costs related to home charging if:

• The home charging point is equipped with a specific communication system which allows the employer to monitor the electricity consumption related to home charging for the company car; and

• The car policy explicitly provides for the reimbursement of electricity costs related to home charging.

In this respect, the circular letter (re)confirms that it is not a requirement that the home charging point is made available by the employer to the employee. Provided the two above conditions are satisfied, the home charging point may be privately owned by the employee or at the disposal of a cohabiting family member.

This tolerance is not limited in time by the circular letter.

Tolerance II: Conditions on the determination of the electricity costs related to home charging

As a general principle, the reimbursement should represent the actual electricity costs incurred by the employee related to home charging (i.e., considering both the actual consumption of the company car and the specific electricity rate applicable to the employee’s residence).

As a tolerance, the circular letter now offers employers the possibility to apply a fixed rate per kilowatt hour (kWh) of electricity used to charge a company car for electricity costs incurred as from 1 January until 31 December 2025. This fixed rate cannot exceed the maximum rate that is determined quarterly by the Ministry of Finance based on the rate specified for each of the regions by the Commission for the Regulation of Electricity and Gas (CREG). The appropriate region (Brussels Capital Region, Flanders, or Walloon Region) is determined by reference to the place of residence of the employee.

For the first quarter of 2025, the following maximum rates will apply:

• Brussels Capital Region: EUR 32.94/kWh

• Flanders: EUR 28.22/kWh

• Walloon Region: EUR 32.56/kWh

The maximum rates for subsequent quarters will be published by the tax authorities.

Employers may also opt to apply a single fixed rate, regardless of the place of residence of the employee. In this case, the fixed rate may not exceed the lowest of the published regional maximum rates for the relevant quarter.

The reimbursement method selected (different rate per region or single rate for all employees) is fixed for the full calendar year.

The amounts stated are the maximum amounts; employers may opt for a lower rate of reimbursement.

Temporary nature of Tolerance II on the application of the CREG rate

The circular letter restricts the use of the abovementioned fixed rate to electricity costs incurred between 1 January and 31 December 2025. At the end of this period, the Belgian government will assess whether an extension of the measure is necessary.

For previous reimbursements made in accordance with the CREG-rate, the circular letter ensures that the tax authorities will assess these with a certain flexibility when the reimbursements were made in good faith by applying the published CREG rates.

Other issues addressed by the circular letter

In addition to the tolerance for the reimbursement of home charging costs, the circular letter also addresses the following:

Employees with solar panels

While the previous ruling practice has not explicitly commented on the treatment in the case of employees with solar panels installed at their home, the circular letter provides clarification on this matter by also referring to employees with solar panels and home batteries. The same fixed rates of reimbursement can be applied.

Transfer of ownership of home charging points

When the ownership of the home charging point is transferred to the employee (e.g., at the end of the leasing period or when the employee leaves the company), the circular letter (re)confirms that the transfer will in principle give rise to a taxable benefit in kind in the hands of the employee. In this respect, the general principle is maintained that the taxable benefit should be determined based on the actual value as at the moment of transfer. The circular letter does not provide any further guidance on how the value should be determined, simply stating that this depends on the factual circumstances and needs to be assessed on a case-by-case basis.

Implications for current car policy

The contents of the circular letter may require companies to review the provisions of their current car policy for the reimbursement of electricity costs and the communication of the implications of that policy to employees.

The temporary nature of the circular letter may also create an opportune time for businesses to reflect on their current charging strategies.