With the rise of electric vehicles, more businesses are facing the challenge of properly accounting for home charging costs. It is crucial to distinguish between cases where an employee uses their own electric car for business purposes and when they charge a company-owned vehicle at home.

If an employee uses their own electric car for business purposes

In this case, the employer can reimburse business-related charging costs. One option is mileage-based reimbursement, where the tax regulations allow for cost deduction based on a predefined fuel consumption rate (3 liters/100 km for electric cars, according to the tax authority).

If the employee can accurately document the charging costs—such as through a separate meter or invoices—the employer can reimburse the amount without it being considered taxable income. However, only business-related usage can be reimbursed tax-free; any private use must be separated, as personal use may result in taxable income.

If an employee charges a company-owned vehicle at home

In this scenario, the charging cost appears on the employee’s personal electricity bill. One solution is for the employer to install a separate meter to exclusively track the company’s vehicle charging, allowing for precise cost accounting without tax implications for the employee.

If the company reimburses a portion of the employee’s electricity bill, it is generally considered taxable income unless the employee can prove that the reimbursed amount strictly corresponds to the company car’s charging costs.

It’s important to note that mileage-based reimbursement does not apply to company-owned vehicles and can only be used for personal vehicles used for business purposes.

Key Considerations

The tax authority closely monitors the legitimacy of home charging cost reimbursements. Installing a separate meter provides the most secure solution but may involve additional costs. Keeping detailed mileage records and accurate documentation is essential for minimizing tax risks.

An experienced accountant can provide guidance on selecting the right method and ensuring compliance, helping the company minimize tax liabilities.

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