Locations
The aspects detailed in the circular relate a.o. to the VAT rate, the VAT deduction right, the place of supply of the various supplies or the VAT treatment applicable to the supplies performed by charge point operators and e-mobility service providers.
The Belgian VAT authorities delivered several individual (unpublished) decisions on this topic in the past. Considering the current number of electric vehicles and the expected increase of this number, the publication of an official position of the Belgian VAT authorities was essential.
This newsflash also briefly comment the impact of the VAT qualification retained by the Belgian VAT authorities on the energy law aspects.
Supply and installation of charging stations
VAT qualification and liability to pay the VAT
Charging stations may consist in charging terminal or charging points (power socket). The Circular confirms that the supply and installation of both types of charging stations are deemed to be located in Belgium when the installation is made in Belgium (supply with installation or immovable works). The installation of both types of charging stations will be subject to the specific reverse charge applicable to immovable work. The reverse charge will also apply on the subsequent invoices issued by the installer for the maintenance of the installation provided that these invoices refer to the global contract covering the installation and maintenance.
Applicable VAT rate
The normal VAT rate is in principle applicable on the supply and installation of charging stations. A reduced VAT rate of 6% may however be applicable on the supply and installation of charging stations in various circumstances. The Circular refers for instance to the reduced VAT rate applicable to immovable works related to buildings used for social housing or housing for disabled, but also to the (temporary) reduced VAT rate applicable on the demolition and reconstruction of private houses.
The Circular also extensively elaborates on the conditions under which the reduced VAT rate can be applied to private houses used for more than 10 years:
- The application of the reduced VAT rate requires that the charging station is for instance installed in the house, in a garage box linked to the house or apartment or in the alley between the garage box and the public road. The reduced VAT rate can consequently not be applied to the installation of a charging station in a garage box rented by an individual in a separate building.
- In case the house is used as well for private as for professional purposes the usual rules for the application of the reduced VAT rate will apply depending whether the private use is the main use or not.
The VAT related to the acquisition or leasing of the charging stations installed in the premises of a taxable person will be deductible according to the VAT deduction right of that person. The charging stations are indeed considered as part of the electrical system of the taxable person. Similar to the costs related to parking spaces, the (private) use of the cars charged with the charging stations does not come into play for the determination of the VAT deduction right.
For charging stations installed in the employee's house, the VAT deduction right of the employer will be determined based on the professional use of the vehicle by the employee (same methods as the one applicable to the vehicle itself). If the employee pays a normal consideration to its employer for the putting at disposal of the charging station, no restriction of the VAT deduction right applies. The Circular also explain how the VAT needs to be adjusted in case the employer/employee can no more use the charging station (for instance the employee moves and leaves the charging station behind).
Charging of the vehicles and involvement of third-party suppliers
(Semi) public charging station and the role of CPO and eMP
The e-mobility service provider ("eMP") is in a contractual relationship with the user or its employer. He provides charging cards for the access to charging stations and information regarding the charging stations (for instance their availabilities). The charge point operator ("CPO") manages the charging stations, charges the vehicles through its charging stations and provides information regarding the charging stations (for instance their availabilities). The CPO is in a contractual relationship with the eMP.
The Belgian VAT authorities consider that the composite supplies of both the eMP and the CPO are to be qualified as the supply of electricity (the other related services are ancillary to the charging of the vehicles). The supply of that electricity by the CPO to the eMP will consequently be deemed to be located where the eMP is established (the eMP reselling the electricity). The supply of electricity by the eMP to the end-user will consequently be deemed to be located where the electricity is used and consumed (i.e. in the Member State where the vehicle is charged).
Qualification from an energy law perspective
According to the regional legislations and the general practice of the regional energy regulators, the operators of public charging stations are usually not considered as suppliers of electricity. Therefore, from an energy regulatory perspective, the VAT qualification retained is not believed to trigger the need for the CPO or the eMP to obtain an electricity supply license. A case-by-case analysis is however recommended considering the various concrete situations encountered in practice and the differences between the regions (e.g. operator self-generating the electricity, large sites with multiple charging stations and charging points).
Charging station in the employee's house
In this scenario, the employee contracts with an energy supplier and incurs the costs related to the charging of the vehicle. The employer usually then contracts with an eMP that will control the meters and help the employer to refund the charging costs to the employee.
Where the employer refunds directly the charging costs to the employee or where the eMP refunds the charging costs to the employee in the name and for the account of the employer, the eMP merely supplies a service subject to 21% (control of the meters and administrative assistance with the refund). Where it intervenes in the refund in the name and for the account of the employer, the eMP will treat the charging costs as a disbursement in the invoice it will issue to the employer.
Where the eMP refunds the charging costs to the employee in its own name and for its own account, the employee is considered as selling the electricity to the eMP who resells this electricity to the employer. The employee will in principle not be considered as exercising an economic activity by selling the electricity to the eMP (even in case the employee would have the status of taxable person for other activities).
Qualification from an energy law perspective
In such a scenario, there is not as such a supply of electricity but a mere reimbursement of costs. The VAT qualification retained is therefore not believed to trigger the need for the employee or the eMP to obtain an electricity supply license.
The employer will be able to deduct the VAT incurred on the electricity it has purchased (not in case of direct refund to the employee or indirect refund through the eMP). The VAT deduction right will however be limited and follow the rules applicable for vehicles. In case the electricity consumption may be individualized per vehicle, the VAT deduction percentage will be the same as for the other costs related to the vehicle. If the employer puts multiple vehicles at disposal of its employees, an overall average percentage may be used for the whole fleet. In case the electricity used for charging the vehicles cannot be distinguished from the overall electricity consumption of the employer, the employer will need to agree on a VAT deduction method with the VAT authorities.
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In case of questions, please do not hesitate to contact the Belgian Tax Team or Energy Team of Fieldfisher.