The Tax Office has updated the knowledge group position papers on charging the company car.
Company car
It concerns the situation where an employee is provided with an electric car, where it has been agreed that all the costs of the car will be borne by the employer (and the employee may pay an own contribution to the employer for the private use of the car). The employee charges this car (among other things) at his own home and pays the cost to the energy company from which he buys the electricity.
Reimbursement
It is clear that the employer may reimburse the employee tax-free for all costs paid by the employee for the car. With regard to electricity for the car, this can be done in two ways:
- reimbursement of actual costs;
- a business transaction.
Intermediate costs
Reimbursement of actual costs may consist of the integral costs incurred by the employee for a kWh: the total of variable and fixed costs divided by the number of kWh consumed by the employee. The energy tax reduction may be disregarded, insofar as it is used up by the employee's private use of the electricity. The costs may also include a proportional part of the depreciation of the solar panels.
Business transaction
In a business transaction, employer and employee make arrangements for the resupply of energy by the employee to the employer. This can include energy generated by solar panels. The arm's length nature of the transaction must be assessed at the time employer and employee make the arrangements. Both the tariff and the duration of the contract must be in line with the market.
Burden of proof
Naturally, employer and employee must substantiate the arm's length nature of the reimbursement or the transaction. In case of doubt, it is up to the tax authorities to make a plausible case that the reimbursement is higher than the actual intermediate costs or than an arm's length reimbursement. Employer and employee cannot suffice with substantiating the reimbursement with an average price, determined by CBS, for example.
You can find the knowledge group positions here: