Temporary clarity on electricity cost reimbursement

On December 5th, the long-awaited circular regarding the reimbursement of home electricity costs was published. Until now, the Minister of Finance had insisted that reimbursements be based on actual costs. However, recognizing the impracticality for many companies and the lack of technological solutions, the minister recently announced in parliament a temporary transitional regime allowing reimbursements based on the CREG tariff.

The circular distinguishes between the reimbursement of electricity costs and the free provision of electricity. Examples of the latter are:

• Provision of a charging card for employees to charge their company car at a public charging station.
• The ability for employees to charge their company car for free at the employer's premises.
• Installation of an additional electricity meter at the employee's home for charging the company car, with a separate energy contract between the employer and an energy supplier.

In case of free provision of electricity, the benefit in kind is part of the benefit in kind of the company car.

When reimbursing electricity, the electricity is billed in the employee's name, and the employee pays the costs directly to the energy supplier. The employer then reimburses these costs, fully or partially, to the employee. The circular states that this reimbursement is generally taxable for private and commuting use.

However, an exemption is possible if the following conditions are met:

• The charging station has a specific communication system that informs the employer of the electricity consumption.
• The applicable car policy includes reimbursement for electricity consumed via the home charger.

The circular confirms that it is no longer necessary for the charging station to be provided by the employer. The condition is that the employee's own charging station must have a communication system that informs the employer of the electricity used for charging the company car at home.

From January 1, 2025, the tax authorities will impose specific accuracy requirements for new charging stations.

The circular confirms that reimbursement by the employer must be based on the employee's actual electricity costs, which must be proven. All common law evidence, except for an oath, is allowed.

However, due to the complexity, a temporary reimbursement based on a specific CREG tariff is permitted.

The CREG tariff, specified in the circular, is determined quarterly. It is the average all-in commercial electricity price on the retail market for residential customers with a digital meter, an electric vehicle, an annual consumption of 8,000 kWh, and an average monthly peak of 7.36 kW, as published by CREG on its website for the relevant month.

For the first quarter of 2025, for example, the average CREG tariffs from August, September, and October 2024 should be considered.   The maximum rate to be used for the first quarter is 28,22 eurocent per KWh for the Flemish region, 32,95 eurocent for the Brussels region and 32,56 eurocent for the Walloon region

Employers must consider the region where the employee resides when determining the CREG tariff. Alternatively, they can choose the lowest CREG tariff, which is typically the tariff for Flanders. Employers can always choose to reimburse less. The maximum tariffs will be adjusted quarterly via an addendum.

This regime (an exception to an exception) is valid until December 31, 2025, but may be extended. Importantly, the administration will assess reimbursements for electricity costs related to the period before January 1, 2025, with some leniency if such reimbursements were made in good faith using the CREG table.