Reimbursement for ‘charged’ electricity. Finance Minister clarifies the rules.

Employees who are provided with a company car are taxed on a fixed-rate benefit in kind. This benefit in kind does not change even if the employer also provides a fuel card.

In the context of greening corporate fleets, the Minister of Finance had already clarified that the reimbursement of electricity ‘charged’ at home does not result in an additional benefit in kind provided that certain conditions are met.

However, there was uncertainty about the conditions that the employer needed to provide a charging station. A recently published answer to a parliamentary question has confirmed that this is not necessary.

Reimbursement of electricity ‘charged’ at home

Employees with a hybrid or fully electric company car are taxed on a flat-rate valued benefit in kind. If they were provided with a charging card, this had no impact on this benefit in kind.

For convenience, employees usually prefer to charge their company car at home. Generally, this is also more cost-effective. The Minister of Finance had previously indicated on several occasions that a reimbursement for electricity charged at home with the company car does not lead to an impact on the benefit in kind, provided that the following conditions are met:

• The employee has a (partially) electric company car;
• The reimbursement of electricity charged at home is included in the car policy;
• The employer provides a charging station or charging cable to the employee;
• This charging solution has an intelligent communication system, based on which the employer can verify the electricity charged at home; and
• The reimbursement of the electricity charged at home is based on the actual electricity costs.

However, there was still discussion about whether the charging station had to be effectively provided by the employer, or whether it was also possible – without an additional benefit in kind – to reimburse the employee for the electricity charged at home if they have a private charging station.

In a recently published response to a parliamentary question, the Minister of Finance confirmed that providing a charging station by the employer is not a condition to avoid an additional taxable benefit in kind, provided that the charging costs can be determined in a verifiable manner. This translates into the requirement that the charging station must have a specific communication system (or can be electronically read), based on which the employer can verify that the electricity has been used to charge the company car. This can also be done via a sub‑electric meter.

Furthermore, it was clarified that the reimbursement of home charging costs does not need to be mentioned on the annual tax statement.

However, contrary to responses to previous parliamentary questions, it is neither confirmed (nor denied) that the tax administration is working on a tax circular specifically regarding (partially) electric company cars. This circular, announced several years ago, would be particularly welcome, especially if it validates the now established market practice of reimbursing home charging costs based on a flat rate (e.g., from CREG). Indeed, any other practice is basically impractical.

Provision of a charging station

In the same response to the parliamentary question, it was also reconfirmed that the provision of a charging station (or an alternative charging solution) does not constitute a benefit in kind if the employee has a (partially) electric company car.

Key message

Employers who currently do not provide charging stations for their employees with (partially) electric company cars can now reimburse the electricity charged at home with the necessary legal certainty. A key point of attention here is that the employer must be able to verify the charged electricity.