The tax regulation of charging stations

With the general greening of mobility, the taxation rules could not stay behind.  Therefore measures were introduced to stimulate investment in charging stations. What follows is a high-level overview of the key elements in the field of income tax and VAT.  

Corporate income tax 

Companies that invest in new charging stations for electric cars between September 1, 2021 and August 31, 2024 can benefit from an increased cost deduction. This actually comes down to an increased depreciation and amounts to 200% for investments as from September 1, 2021 to December 31, 2022 and 150% for investments as from January 1, 2023 to August 31, 2024. The increased cost deduction only applies to fixed charging stations and not to charging cables. Additional costs such as transport costs, installation costs, study and expertise costs are also eligible for the increased depreciation.

Conditions are that the charging station:

• is acquired in new condition
• is publicly accessible during the company's usual opening hours or closing times; these must   then be reported to the FPS Finance, which publishes these on a website so that everyone can consult the accessibility
• is digitally linked to a management system that can control the charging time and charging capacity of the charging station
• is depreciated on a straight-line basis over at least 5 years, assuming a normal life of a charging station of 10 years.
  In addition, for SME companies, the increased cost deduction can be combined with the one-off investment deduction (still 25% until December 31, 2022).
  
  

Personal income tax

The above-mentioned increased cost deduction also applies in the personal income tax for tax payers earning profits or gains. 

When a private individual purchases a home charging station between 1 September 2021 and 31 August 2024, he is entitled to a tax reduction.  This amounts to 45% of the amount of the payments made for investments between 1 September 2021 and 31 December 2022, 30% for investments between 1 January 2023 and 31 December 2023 and 15% for investments between 1 January 2024 and 31 August 2024.

Conditions are amongst others that the charging station

• is acquired in new condition
• is intelligent, meaning that it must be possible to control the charging time and capacity
• must only make use of green electricity
• must be installed in or near the home of the tax payer.

The amount that qualifies for the reduction is limited to EUR 1.500 per charging station and per taxpayer, and the reduction may only be requested for one taxable period. 

 

VAT 

The VAT treatment of charging stations is included in Circ. 2021/C/113 of 13 December 2021 and can be summarised as follows.  

1. Installation of the charging station 

- Rate

The delivery and installation of a charging station (= charging stations + charging points) is considered as real estate work.  This work is subject to the reduced VAT rate of 6% if it is done on a private home that is more than 10 years old and that is primarily used for residential purposes.  Several conditions must be taken into account.  
Deliveries that do not meet the set conditions fall under the normal VAT rate of 21%.

- Deduction

a. Charging station installed at the company’s premises 
A charging station installed at the company's premises is considered to be part of the company's electrical installation where there is a 100% VAT deduction, provided the station is used exclusively for the economic activity of the company that has full right of deduction.  This is the case if it is only used by:

• Directors and employees
• Customers and suppliers of the company (regardless of payment or not
• Third parties against payment.

This also applies when the company rents the charging station on its site.  

 

b. Charging station installed at the employee’s home
A charging station that is installed at an employee's home is not part of the company's electrical installation. The following distinction must be made:

i. The charging station is provided free of charge 

• The deduction of VAT must be limited to the business use of the car, with the understanding that the general deduction limitation for cars of 50% does not apply here.
• If the charging station leaves the company (e.g. when the employee moves and the charging stations remains behind), the employer must revise the VAT deducted as long as the 5-year revision period has not expired. 

 

ii. The charging station is provided for a compensation (= in the case of a rental/purchase of the station by the employee from the employer, reduction of the net salary in exchange for making it available or within the framework of a cafeteria plan with a points system)

• VAT will be charged on the compensation.  Consequently, there is no deduction limitation provided that the compensation corresponds to the 'normal' value.
• When determining the normal value, the ratio professional/private use of the car must be taken into account.  
  

2. Consumption of electricity 

• The VAT deduction should be limited in function of the ratio professional/private use of the car.  Here the general 50% limit does apply as the electricity is considered to be fuel.
• If the electricity consumption can be measured separately for each vehicle, the right to deduct is further determined according to the deduction percentage of the vehicle.
• If this is not the case, the deduction percentage is determined under the supervision of the administration. 

 

Conclusion 

The greening of mobility also has tax implications.  Each case must be examined carefully in order to apply the tax rules correctly.