In 2021, the ‘green revolution’ within the Belgian mobility landscape was introduced. The legislator drastically intervened in the social and tax treatment of combustion engine vehicles to ensure that the Belgian vehicle fleet would electrify at a rapid pace.
Based on information provided by Statbel the number of electric vehicles has increased with almost 255% since 2022. Considering that 82% of all electric cars are company cars, it goes without saying that this transition in practice creates various challenges for employers.
Many employers provide a charging card to charge the car at public charging stations. Additionally, a wall box or home charging station is often provided allowing employees to charge their car at home. The costs associated with a charging session at a public charging station are billed directly to the employer. For a home charging session, the costs are part of the employee’s energy bill. How the reimbursement of these costs should be handled was not (clearly) regulated by law.
Circular letter: Introduction of new administrative tolerance until the end of 2025.
As a response to Parliamentary question 472, the Minister of Finance had taken the position that: “The reimbursement by the employer must be based on the actual electricity costs of the employee. For this purpose, all means of proof under common law, except for the oath, are permitted.”
To end his answer with: “There are currently no plans to deviate from this and publish a fixed amount per kWh annually. A single flat rate for the entire territory would be challenging, especially considering the distribution network tariffs and transmission costs that vary from one network operator to another.”
This created numerous practical challenges for companies, as determining the exact cost per employee for each individual charging session is, in practice, impossible. The cost is highly dependent on various factors, such as whether an individual has access to solar panels, capacity tariffs, and more. In practice, almost every employer reimbursed the costs for home electric charging based on the average electricity tariff published by the Commission for Electricity and Gas Regulation (hereafter: “CREG”).
Unexpectedly, at the end of September, the minister announced that his administration was working on a circular letter, in which the tax authorities would -temporarily- accept a reimbursement based on a “specific CREG tariff”. On the 5th of December the long-awaited circular letter (2024/C/77) was published.
The most notable elements are:
Timing
- The tolerance is valid for costs incurred in the course of income year 2025. The administration will reassess whether an extension beyond income year 2025 is necessary.
- Any reimbursement related to costs predating income year 2025 will be assessed by the tax authorities with the necessary leniency.
Amount
- Maximum amounts are determined on a quarterly basis and vary according to the region the employees reside in:
- Flanders region: € 28.22 /kWh
- Brussels Capital Region: € 32,94 /kWh
- Walloon Region: € 32,56 /kWh.
Important side notes to consider:
- It is important to note that the tolerance only applies to employees who are provided with a company car by their employer
- It is irrelevant whether the employer provides a charging station to the employee
- The employer must still be able to determine the exact electricity consumption
- No reference is made to solar panels. It can reasonably be expected that they can also benefit from the tolerance.
The publication of this circular letter provides companies with legal certainty and simplification, which can only be seen as positive.
For more information or if you would like to discuss this topic, please do not hesitate to contact Bart Van den Bussche, Pierre Demoulin or your regular PwC contact person.
