?? Should a Home Owners Association charge Dutch VAT on EV charging?

Introduction

?? Greetings, readers! In the realm of Vereniging van Eigenaren (VvE) (Homeowners' Associations), I see an increasing need for clarity on the Dutch VAT treatment of EV charging sessions. The same goes for Dutch home owners who install a charging point at home and get the charging costs reimbursed by their employer. As the installation of charging points at home and at VvE parking spaces grows, questions arise about the proper application of Dutch VAT.

1. Vereniging van Eigenaren (VvE)

?? A Simplified Example of VAT calculation for Clarity For illustration purposes, let's consider an exaggerated and fictitious scenario where a VvE buys electricity at a very high rate of €1 per kWh, exclusive of Dutch VAT. Note, this price is purely hypothetical and used here for easy calculation. When the power supplier adds 21% VAT, the cost to the VvE becomes €1.21 per kWh. The VvE, seeking to recover these costs from EV drivers, sets a charging rate mirroring this amount. The EV charging card issuer then purchase electricity at this inflated rate of €1.21 and sell it to EV drivers, again adding 21% VAT. As a result, the EV driver pays €1.47 per kWh instead of €1.21 per kWh, a significantly higher amount, showcasing the effect of VAT cumulation.

?? VAT Registration for the VvE If a VvE operates an EV charging station, it may be liable to register for VAT. By registering as VAT-liable entity, a VvE would avoid the double imposition of VAT. This allows them to set their charging rates exclusive of VAT, with all parties in the EV supply chain adding VAT subsequently when selling to EV drivers. VvEs should consult with a tax professional to determine whether they are obliged to be registered for VAT or whether this is optional in their situation.

Many VvEs are not aware of these obligations and are not looking for additional admin burden. Maintaining compliance with VAT laws is however crucial to avoid legal and fiscal penalties. Moreover, correct application of these laws helps prevent unnecessary cost increases for EV drivers. For more detailed information or specific guidance, feel free to reach out.

2. Employees getting reimbursed for EV charging at home

Employees with an EV charging station at home may have agreements with their employers to cover home charging costs ?? . The CPO enables these employees to automatically reconcile their electricity costs with their employer by integrating the charging passes with their charging station ?. This process eliminates the need for employees to submit expense reports ??, as the charging costs are billed to the employer (via the card issuer) and reimbursed to the employee.

The employee sets the reimbursement rate on the charging station's software, likely aligning with the cost they pay to the energy company, inclusive of VAT (€1.21 per kWh in the above example) ??.

For VAT purposes, the key question is whether the employee should be considered as entrepreneurs supplying electricity to the CPO, who then redistributes it ??. If the employee is deemed to be supplying electricity to the CPO, it could impact how VAT is applied and accounted for in this chain of EV charging and reimbursement. It also impacts whether the employee should register for VAT and whether there is VAT recovery on the costs of the charging station. There are several ways to look at this and I strongly recommend employers and parties in the EV value chain to undertake an in-depth analysis to determine the impact and obligations.

For assistance on VAT related to EV charging, let's connect! #EVCharging #VAT #TaxAdvice ??????