What’s the situation regarding tax deductibility?

Electric vehicles are becoming increasingly commonplace, including in the corporate world. The main drawback is that they are still significantly more expensive than their diesel or petrol counterparts. Still, it’s worth considering that electric company cars are fully tax-deductible and that drivers are also entitled to other benefits:

• Fully electric vehicles are exempt from vehicle registration tax and road tax in Flanders
• The electric vehicle, charging station and electricity costs are fully deductible for corporation tax purposes
• Your employer pays the small CO2 solidarity contribution
• The benefits in kind for employees are lower than for drivers of fossil-fuel vehicles 

If you order an electric vehicle before 1 July 2023, the current calculation of the CO2 contribution will apply.

• The minimum contribution of 20.83 euros (= the non-indexed amount) will remain unchanged
• However, the indexation coefficient is subject to change annually

If you order an electric vehicle after this date, the current calculation will remain unchanged, but the minimum CO2 contribution will be increased annually starting in income year 2025.

You must multiply the minimum contribution by the indexation coefficient. From 1 January 2023, this coefficient will be 1.5046.

Electric vehicles ordered before 1 January 2027 will remain fully tax-deductible.

The tax deduction for electric vehicles ordered on and after 1 January 2027 will be gradually reduced to 67.50% in income year 2031, and the applicable tax deduction will depend on the income year in which the vehicle was ordered. Note that the tax deduction will remain unchanged during the full term of the contract. 

1. Charge points on the company site

In principle, the tax deductibility rules applying to charge points are the same as for the vehicle. However, to promote the installation of charge points, new legislation enacts different rules when it comes to tax deductions for charge points and emission-free vehicles.

Costs relating to the installation of charge points will remain fully tax deductible until the end of income year 2029, after which that figure will be reduced to 75%.

Businesses (sole traders and companies) that invest in publicly accessible, smart charging stations between 1 September 2021 and 31 August 2024 are entitled to an increased tax deduction:

• A 200% tax deduction for new charge points purchased between 1 September 2021 and 31 March 2023
• A 150% tax deduction for new charge points purchased between 1 April 2023 and 31 August 2024

To qualify for this increased tax deduction, all of the following conditions must be met:

• The charge point must be accessible to the public, which means that everyone with an emission-free vehicle should be able to use the charge point, at least during or after business hours. Moreover, the charge point must be registered with the Ministry of Finance in order for users to be able to check its location and availability.
• It must be a ‘smart’ charge point that is connected to an energy management system that can control the charging time and charging power.

2. Charge point included in a lease contract

Charge points covered under the lease contract and installed at the driver’s home address are fully deductible for corporation tax purposes. 

3. Charge points purchased by a private individual

Private individuals (homeowners and tenants) who purchase and install a charge point between 1 September 2021 and 31 August 2024 are entitled to tax relief.

This tax relief applies to the purchase, installation and inspection of new charge points and amounts to:

• 45% for charge points purchased between 1 September 2021 and 31 December 2022
• 30% for charge points purchased in 2023
• 15% for charge points purchased in 2024

For expenditure made on or after 1 January 2023, the maximum per taxpayer is 1 750 euros for a unidirectional charge point and 8 000 euros for a bidirectional charge point.
The figures cover the cost of purchasing a charge point in a ‘like new’ condition, its installation and inspection.

To qualify for this tax relief, all of the following conditions must be met:

• The charge point may only use green energy, through a green energy contract or the user’s own renewable energy (or a combination of the two).
• It must be a ‘smart’ charge point that is connected to an energy management system that can control the charging time and charging power.

See circular 2021/C/115 on the fiscal greening of mobility for more information (in Dutch or French).

Tax Leaflet for Company Cars: Tax and your vehicle fleet – Corporate Banking – KBC Banking & Insurance