Belgian Parliament: Should charging an electric car be considered a separate benefit?

Employees who given a company car are, in most cases, also provided with a fuel card. If an employer provides an electric company car, the employer often also pays for the electricity to charge the car. This is to make sure employees who have an electric company car are in the same situation as employees with a petrol or diesel company car. In Parliament, the question was raised how this should be treated from a tax or social security point of view.

The Finance Minister responded by repeating the general principle in relation to reimbursing travel costs. These basic principles apply irrespective of the type of car:

• The costs of travelling for purely professional purposes, for instance when driving to visit a client, are not considered to be a benefit in kind. No taxes or social security contributions are due if the employer pays these costs.
• When it comes to the costs resulting from travelling for private purposes, there is a benefit in kind if the employer pays these costs. This contribution by the employer is subject to taxes and social security contributions. There is, nevertheless, the practical difficulty of determining the value of this benefit in kind.

If the employee is provided with an electric company car and the employer also pays the electricity bills for charging that car or the employer allows the employee to charge the car when at work, the Finance Minister says the electricity is not a separate benefit in kind. The company car itself is a benefit in kind, and its value is determined on a lump sum basis in relation to the value of the car, its CO2 emission (for fuel or diesel cars) and the type of fuel used by the car. This lump sum evaluation does, however, already include the value of the fuel or the electricity used by the car. No extra taxes or social security contributions are due when comparing an employee who is provided with a company car, but no fuel card, and an employee who is provided with both a company car and a fuel card.

According to the Finance Minister, the same principle can be used for electric cars. There’s no separate benefit if the employer reimburses the costs for charging the electric car or provides electricity. This assumes that the reimbursement of the electricity is limited to the electricity used for the car. If the employer pays the employee’s full electricity bill, it would be a benefit in kind. The employer should be able to establish that the reimbursed electricity was used to charge the electric company car.

The Minister added that there is, for the moment, no lump sum evaluation if electricity should be considered a benefit in kind. If there is a taxable benefit in kind, the value of the benefit should be assessed on the basis of the actual electricity bill. Bearing in mind the differences in price charged by various electricity companies, a lump sum evaluation per kWh of electricity applicable in all cases would be difficult to calculate.

The Parliamentary question concerned the electricity costs for charging an electric car. We can assume the tax administration will apply the same principle when it comes to employees provided with an electric bicycle.

The Parliamentary question merely considered the electricity used for a company car, hence not the tax aspects concerning the installation cost of a charging station or the tax aspects of providing electricity (without a car).