Charging EVs at home via a charging station or point is also more energy-efficient and ten times faster than charging an electric car through a standard outlet.

Private individuals who choose to buy and install a charging station ar home between 1 September 2021 and 31 August 2024 are entitled to a tax reduction, as stated in a new law. The total installation cost has also been reduced to further encourage people to invest in their own charging stations.

The tax reduction is granted for the expenses related to purchasing and placing a home charging station where the individual has established their place of residence.

Owners and tenants of an immoveable property who invest in a home charging station can also benefit from the tax reduction.

By 2026, a new legislation on the deductibility of company cars will impose zero emissions as a requirement for the cars to be 100% tax-deductible, which is why it is financially advantageous for companies to offer electric vehicles to employees and help them invest in charging stations at home.

Charging station or charging point?

There is a distinction to be made between a charging station and a charging point.

Charging points refer to the individual electrical connection with a plug attached to the wall and connected to the electric vehicle, while a charging station is anchored to the ground, which by nature makes it a real estate asset.

Charging points consist of electrical sockets that are designed for charging electric vehicles. Although the sockets are usually placed against the wall of a property, meaning they are also considered real estate assets by nature, they also retain their moveable character for VAT purposes.

The VAT rate on the installation

Delivery with the installation of a charging station is, in principle, subject to the standard VAT rate of 21%. Nevertheless, the reduced rate of 6% can be counted on in certain situations.

By installing the charging station in or at an employee’s home, for example, the reduced rate can be applied even if the charging station remains the employer’s property. In essence, this means the employer and who makes the charging station available to the employee, for a fee or for free.

An essential condition for the reduced rate for the renovation of private homes is that the house has been a private residence for at least ten years. Specifically for a charging station , the requirements also state that it must be installed:

• in the private residence itself or on its outer facade, or
• in or on the facade of the garage or carport of the resident of the private home, or
• on the access road that connects the public highway with the garage that is part of the house, or with the main entrance to the house, or
• on the outside terrace, which is considered part of the house because it adjoins it.

If the charging station is not installed in the actual home or, more generally, in a place other than that stated above, the reduced rate cannot be applied, as location that are not connected to the home itself are excluded by the law.

A private individual who places their charging station in the garden adjacent to the house or a parking space next to the driveway, for example, is not entitled to the reduced rate.

A charging station can also be installed in or attached to a mixed-use building. This could include a building with a doctor’s practice and the doctor’s private home. When personal use predominates compared to professional use, a reduced rate can be applied. If professional use is predominant, the rate of 6% is limited to works related to the private home.

A reduced rate of 6% (or sometimes 12%) is also possible in the context of demolition and reconstruction and for buildings with education purposes, social policy or assisted living facilities , of course, under the specific conditions that apply in each case.

Reverse charge at installation

If the co-contracting party is a company that submits periodic VAT returns, it will receive an invoice in which the VAT may have been reverse-charged. The reverse charge is then calculated based on the VAT rate as determined above.

The reverse charge applies to the delivery and installation of a charging station and/or to the delivery and installation of a charging point when the charging infrastructure concerned is part of the electrical installation of the building.

The reverse charge VAT also applies to one global agreement (installation with maintenance and/or additional services) if every invoice refers to the installation.

VAT deduction for an installation at a company

The principle of deductibility is that the installation of the charging station is regarded as part of the company’s electrical installation and not as a car expense. Therefore, the typical mixed-use car restriction rules do not apply.

The VAT on the installation costs is fully deductible if this installation is and remains exclusively for the purpose of carrying out VAT-taxable transactions in the context of the economic activity.
It is important to note that there is no VAT deduction to the extent of possible free use by third parties, i.e., other than employees, directors, customers, and suppliers (for example if it is possible for people of the general public to charge their electric vehicle for free on the site of a business).

VAT deduction for an installation at an employee’s home

There is only a deduction to the extent that the charging station is used professionally. A distinction must be made between posting to the employee for free and posting for consideration.

Important to consider here is that when a charging station is made available in exchange for a reduction of gross wages, this is considered by the administration as a free provision.

This is in contrast to a reduction in the net salary, or even when using a so-called cafeteria plan with a points system when the employee then waivers other benefits due to the charging station.

If the charging station is made available to the employee free of charge, the deduction must be limited to the amount of the professional use of the electric car made available to the employee. However, there is no maximum VAT deductibility of 50%.

There is no deduction limitation if the employee obtains a charging station at his home for consideration (either rented from the employer or owned or via hire-purchase). A rental fee must take into account the so-called normal value. In this case, the deduction limitation of up to 50% does not apply here either.

By Victoria Labisi Biodun-Bello, Consultant at Pink Bay