Charging stations: VAT regime
April 2022 – At the end of 2021, the legislator issued a law that aims to green our mobility, on the one hand, by abolishing the tax deduction for vehicles powered by fossil fuels and, on the other hand, by encouraging investments in C02 emission-free travel. Businesses benefit from an increased deduction for the installation of charging stations. Private individuals are entitled to a tax reduction. But what about the VAT regime applicable to these charging stations?
Individuals
Anyone who has a charging station installed must pay VAT on the invoice. Since a charging station built into the ground, your house or perhaps your carport is considered to be immovable property, you can benefit, if applicable, from the reduced VAT rate of 6% for conversions to dwellings older than 10 years.
According to the VAT administration, the reduced rate can be applied if the charging point is installed :
in the private dwelling itself or on its exterior façade
in the garage or carport of the occupant of the private dwelling or on the facade of these annexes (this includes private garage boxes in apartment buildings, private parking spaces located in or under apartment buildings, provided that the flat to which they belong is used as a private dwelling)
on the access road from the public highway to the garage which forms part of the dwelling itself or from the main access to the dwelling or building
on the outside terrace which is an integral part of the dwelling, because it is adjacent to it.
The charging station must therefore be connected in some way to the building. If you have the charging station installed in a garage box further down the street, you cannot benefit from this rate.
Employee
As with private individuals, employees who have a charging station installed can benefit from a reduced rate of VAT if the house where it is installed is at least 10 years old. The reduced rate also applies if the charging station is paid for by the employer. It is also irrelevant whether the employer provides the charging station free of charge or against payment to the employee.
Entrepreneur
For businesses, there are two aspects that are important: the rate on the one hand and deductibility on the other.
Regarding the VAT rate: buildings that are partly used for business purposes cannot benefit from the reduced rate if the business use is predominant unless the charging station is installed in the private part of the house. However, the reduced VAT rate does not apply if the charging station is installed in the business part of a dwelling which, as a whole, is used mainly for private purposes.
In addition to the rate and the deduction, we should also point out that if the real estate work is supplied to a VAT taxable person, the deferral of tax collection must be applied. The contractor, therefore, invoices without VAT and the client pays the VAT via his own return. This applies not only to VAT on the installation of the charging stations but also to VAT on the maintenance and other ancillary services of the provider (such as access to the digital platform), provided that the maintenance and ancillary services are part of a single contract.
As far as VAT deduction is concerned, it depends on where the company has the charging station installed. If it is installed within the company itself (and not at one of the employees' homes), the charging station will be considered part of the company's electrical installation. VAT is then fully deductible in the following three situations:
the charging station is used only by the directors, managers and employees of a taxable business with a right to full deduction
customers or suppliers of that business (whether or not in return for payment) may use the charging station in the course of their visit to that taxable person
third parties may use the charging station, in return for payment.
Even if the business rents the charging station, and does not own it, it has a full right of deduction.
The situation is different when the charging station is installed at the employee's premises. The tax authorities distinguish between charging stations that are made available to employees free of charge and those that are made available in return for payment. If the charging station is made available to the employee free of charge, the VAT deduction on the installation costs is limited to the professional use of the car. For VAT purposes, there are three methods for determining the business use of a vehicle: the method based on the actual business kilometres driven, the semi-fiscal method and, finally, the general flat rate of 35%. The VAT deduction for the charging point therefore follows the VAT deduction, according to one of the three methods, applicable to the vehicle itself.
If the employee pays for the charging point (if, for example, he rents it from the employer) or if his net salary is reduced in exchange, the employer must deduct VAT from the remuneration. The deduction of VAT on the installation costs is not limited in this case either. However, the tax authorities require that the remuneration paid by the employee is equal to the normal value. Not only must a normal depreciation period (5 years) be taken into account, but the VAT base must also be limited to the private use of the vehicle.
Greener, but not simpler
As you will have noticed, the measures taken at the end of 2021 to encourage you to make your car fleet greener and switch from fossil fuels to electricity also have consequences for VAT. These VAT consequences have not been adapted, which makes the investment decision even more difficult.
