FAQ for employers: Installing electric charging stations at an employee’s home residence.
In its September 2020 declaration, the Belgian government announced that all new company cars must be emission free by 2026. This is a very ambitious target, knowing that currently only 1% of the Belgian cars is electric driven. The Minister of Finance recently clarified the plans for achieving this target: electric and zero-emission company cars will become more tax friendly whereas the tax advantages applicable to the “traditional” gasoline and diesel company cars will gradually disappear. New tax incentives to boost the installation of electric charging stations are foreseen. It can be expected that such charging stations will not only be installed at the company premises but also at the employees’ home residences: more and more employers will offer their employees the possibility to have an electric charging station installed at home, whereby the employer bears all related costs. The installation of such electric charging station at an employee’s home residence triggers some practical questions, both from an employment and a regulatory perspective. We listed and answered them for you in the below top 10 Q&A.
1. Does the installation of an electric charging station at an employee’s home residence result in a taxable benefit during the employment relationship?
No. The Belgian tax administration already confirmed several times that during the employment relationship, the use of an electric charging station installed at an employee’s home residence does not result in a taxable benefit in kind, coming on top of the taxable benefit in kind for the personal use of a company car. This approach is the same as the one taken with respect to company cars put at the disposal of an employee together with a fuel card. The Belgian social security administration’s position is aligned.
2. An employee rents a house. Can the employer and employee decide to install an electric charging station in a residence that is rented?
The answer depends on the wording of the lease agreement. Normally, a tenant has an accessory right to build for the duration of the lease agreement and can build constructions or installations, be it that a prior approval of the landlord could be required. Such right needs to be exercised with moderation as most likely, the tenant is to remove such installation at the end of the lease term as part of its reinstatement obligations.
In any case, it is advisable for the employer to verify with the employee in advance the modalities of the latter’s lease agreement before deciding to install an electric charging station in the residence of the employee-tenant.
The employee-tenant should notify his/her insurance company about the new installation.
3. What if my employee owns/rents a parking space in an apartment building?
It is still possible to install an electric charging station. If no communal parts are needed for the installation of the electric charging station, the employee-owner will not have to comply with any obligations. The employee-tenant will usually need the consent of his/her landlord.
If the electric charging station is installed in a communal part of a building or its cables pass through communal parts, the employee (by way of his landlord if he/she approves) will have to notify the co-owners at least two months before the installation. Within two months after the receipt of this notification, the co-owners or the association of co-owners have in a limited number of situations the possibility to object to the works.
4. Is a building permit required to install an electric charging station in the home residence of an employee?
Whether a building permit is required depends on the region:
|Flemish region||No building permit is required|
|Brussels Capital Region||Under certain conditions no building permit is required|
|Walloon Region||No building permit is required|
5. Is an environmental permit required to install an electric charging station in the home residence of an employee?
No environmental permit is required in the Flemish region, the Brussels Capital Region, or the Walloon Region.
6. The employee-tenant decides to move. What are the consequences for the electric charging station installed by the employer?
The employee-tenant cannot grant a right to build to his/her employer. Therefore, parties should agree that the electric charging station remains the property of the employer and will be removed before the end of the lease agreement to avoid that the landlord receives the property rights following the accession at the end of the lease (“natrekking/accession”).
Another possibility is to leave the electric charging station at the premises. In such scenario the employee-tenant may receive a compensation for this installation from the landlord if the latter gave permission for the installation of such electric charging station. The employee-tenant should then pay this compensation to its employer. If the landlord did not give its permission, the employee-tenant will most likely not be entitled to a compensation for the electric charging station from the landlord.
7. The electric charging station installed by the employer has caused a fire. Who is responsible for the damage?
In case of fire, there is the rebuttable presumption that the employee-tenant is responsible. As the user of the electric charging station, the employee-tenant will thus most likely be appointed as the responsible party for the fire except if there was a case of force majeure or he/she can prove that the fire was caused through no fault of his/her own. Therefore, we again emphasise the importance of notifying the insurance company of the installation of the electric charging station.
8. The employee is on long-term sickness. Upon expiration of the guaranteed salary period, the employer prohibits the employee using the electric charging station installed at the employee’s home. Is such prohibition valid?
Yes. Upon expiration of the guaranteed salary period, the employee is no longer entitled to salary and benefits from the employer, but receives sickness allowances from the sickness fund instead. An employer can thus prohibit the further use of the electric charging station. The electric charging station follows the same regime as applicable to other benefits granted by the employer to an employee: upon expiration of the guaranteed salary period, an employer can suspend the employee’s use of a company car, mobile phone, laptop, etc. Of course, an employer can decide otherwise. If so, a continued use during a long-term sickness period must be correctly processed from a tax and social security perspective.
9. The employer dismisses an employee with immediate effect. The employee is entitled to an indemnity in lieu of notice. Must the electric charging station be taken into account as a benefit for calculating the indemnity in lieu of notice?
Yes. This qualifies as a benefit which must be taken into account when calculating the indemnity in lieu of notice (similar as a fuel card).
10. The employment relationship comes to an end. What happens with the electric charging station the employer installed at the employee’s home address?
It is recommended to clarify this in the company car policy. Several options can be considered.
The company car policy can provide that the employer (or the leasing company) will remove the electric charging station. The costs are at the employer (or the leasing company)’s expense.
As the removal cost is often quite substantial and not justified in function of the economic residual value, many company car policies provide for a transfer of ownership. Such ownership can be obtained for free or by paying a compensation. The question arises whether such transfer of ownership results in an advantage for the employee, subject to tax and social security withholdings. The Belgian tax administration already clarified its position in this regard in several tax rulings. Depending on the remaining depreciation value and the economic residual value, the transfer of ownership may result in a taxable benefit. In general, the position is taken that electronic charging stations are amortised over a 4 years period. After 4 years, and although the electric charging station may still function perfectly, it will be subject to economic obsolescence and technical evolutions, reason why in such circumstances, the transfer of ownership will in practice not result in a taxable benefit. Although the Belgian social security administration did not yet publish any formal instructions, they confirmed to align with the Belgian tax administration’s position.
In summary, the following scenarios may arise:
|The employment relationship comes to an end in the course of 4 years following the installation of the electric charging station at the employee’s home residence.||The employment relationship comes to an end more than 4 years following the installation of the electric charging station at the employee’s home residence.|
|Option 1: Transfer of ownership for free. The employee does not have to pay when becoming owner of the electric charging station that was installed by the employer at the employee’s home residence.||This situation results in a taxable benefit, triggering the payment of taxes and social security contributions, the amount of which is determined in function of the actual residual value of the electric charging station.||Provided the compensation is aligned with the actual residual value of the electric charging station, the transfer of ownership does not result in a taxable benefit and does hence not trigger the payment of taxes and social security contributions.|
|Option 2: The employee pays a compensation to the employer as a counterpart for the transfer of ownership of electric charging station.||Under this option, the transfer of ownership does not result in a taxable benefit, assuming that the actual value of the benefit for the employee is negligible (also taking into the account the fast technical evolutions and developments for this type of product).||This scenario is less likely to happen as it is common practice to depreciate electric charging stations over a 4 years period. Therefore, and provided no specific circumstances are at and, under this option, the transfer of ownership does not result in a taxable benefit.|
For more information on this topic, feel free to contact Emma Van Caenegem.
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