30 March 2022
Five questions and answers about electric cars for your company
Are electric cars and vans really fiscally advantageous for my company? Do I also have to offer my employees a charging column at work or at home? And what should I look out for if I choose electric vehicles?
Five questions and answers you need to know before making the switch to electric vehicles:
Electric vehicles and hybrid models are still considerably more expensive than similar petrol and diesel models. Moreover as things stand you can still deduct a large part of the purchase cost of a new diesel or petrol vehicle, as well as fuel, maintenance and insurance. Looking only at the purchase price and the tax treatment, a vehicle with an internal combustion engine is often still seen as a logical choice for your company. But it will not remain so for much longer:
- Diesel and petrol vehicles and hybrids ordered between July 2023 and December 2025 still benefit from a transitional scheme.
- But, for internal combustion engine vehicles acquired from 2026 onwards, the tax advantage will disappear completely. It will therefore become more attractive from the tax point of view to go for 100% electric. Moreover, the price differential between electric and combustion engines is likely to narrow further in the coming years.
Attention: until the end of 2026, the lifetime tax deductibility of fully electric vehicles will remain. But for a purchase between 2027 and 2031, this deductibility is gradually reduced to 67.5%. That is considerably less than today (100%), but will be a lot more than for diesel, petrol or hybrid models (0%).
2. How much does an electric vehicle cost compared with an ordinary vehicle, all included?
The purchase price and taxation are important issues to consider. But not the only ones. If you are considering a new car or van for your business, it is best to look at the total cost of ownership. So from the moment you put your signature on the order form until you decommission the vehicle. You should also pay attention to the following:
- Energy costs: do you charge the vehicle at the office, at home, at a public charging column or a fast charger? At the office is usually the cheapest (companies usually get lower rates than individuals), while a fast charger along the motorway can sometimes be 4-5 times more expensive.
- Maintenance: an all-electric vehicle normally requires less maintenance (fewer moving parts, no engine oil changes, no drive belt or spark plug changes, etc.). In electric vehicles, kinetic energy is converted into electricity and thus recovered. This also works as a motor brake, so that the ordinary brakes wear out less quickly.
- Loan and insurance: if you choose electric, you can sometimes get better terms.
- Residual value: on average this is higher than for diesel vehicles and is close to the residual value of petrol vehicles.
Buy or lease?
That depends on your possibilities and your preferences. In this article you will find more details about the differences and the advantages and disadvantages of buying and leasing (also for your bookkeeping).
3. Can you deduct the electricity for your electric company vehicle?
Yes, all costs related to the company vehicle (maintenance, repairs, electricity, etc.) are deductible at the same level as the vehicle. If you buy a fully electric vehicle before 2027, you can deduct 100% of the electricity.
Electric driving requires some adjustments. For example, there is no manual gearshift, an electric vehicle accelerates faster and slows down faster when you take your foot off the accelerator. An electric test vehicle or even a familiarisation programme can smooth the way to confident electric driving.
4. Installing a charging column at work: is this also advantageous from a tax point of view?
Yes, you can deduct this cost in full from tax year 2022 onwards. From 2030 onwards, this unlimited deduction will be abolished and replaced by a fixed rate of deduction of 75%.
Companies that invest in publicly accessible charging columns (i.e. not only for themselves or employees) until the end of August 2024 are also entitled to increased depreciation. If the investment takes place in 2022, the investment can be depreciated at 200%. Thereafter (until 31 August 2024), this depreciation rate will fall to 150%.
Apart from taxation and personal convenience, a charging station can also be interesting in offering customers and other visitors an extra service. For example, if you own a supermarket or a furniture shop. In this way, customers can charge their vehicles while shopping.
5. Do you also have to provide a charging column at your employees' homes?
You are not obliged to install a charging column at your employees' homes or at work. In certain cases - for example, when there is no charging column at work - you can of course consider it. Several scenarios are possible:
- The employee is given a charging card with which to charge the vehicle at a public charging station. As an entrepreneur, you can deduct these costs. More and more new public and semi-public charging stations are being built. For Flanders, an additional 11,000 columns have been announced by 2022. In Brussels and Wallonia, however, availability is so far lower.
- The employee charges the vehicle at home via a charging column that you arrange to have installed. You can deduct these costs in full (see question 2). However, you must also reimburse the employee for the electricity that he pays to his supplier. This can become very complicated. You need a smart charging column to know the exact consumption and you also have to pay the actual electricity cost (not flat rate!). If the employee has his own solar panels the situation may become even more complicated. Be sure to consult your accountant first.
- The employee charges the vehicle at home via his own charging column or without a charging column. In that case, there is an additional benefit in kind (VAA) for the reimbursement of electricity costs by the employer. Good to know: if the employee installs the charging column before September 2024, he benefits from a tax reduction of 45% on the price of a charging column (with a maximum of €1,500).
New vehicle(s) for your company?
Find out how to finance it or them with: