Belgium has an extensive system of tax rules that apply to employers and employees. Employers must be aware of these rules in order to act correctly and efficiently. In this article, we discuss three important aspects of taxation for employers: provision of benefits, reimbursement of actual costs, and flat-rate expense allowances.

1: Provision of Benefits

In Belgium, employers can provide various benefits to their employees. This can be in the form of a fuel card, a company car, a charging station, electricity for charging the car or a mobile phone with a subscription. The provision of benefits in Belgium is described in Belgian tax legislation and administrative guidelines. The most important sources are:
Income Tax Code 1992 (WIB 92): This code contains the general rules regarding taxable income, including benefits in kind (BIA). Specifically, article 36 deals with benefits in kind provided by the employer to the employee.
Royal Decrees: These decrees provide further details and clarifications on the calculation and application of the tax rules. For example, the Royal Decree of 8 October 1981 provides further rules on the valuation of benefits in kind.
Circulars of the Federal Public Service (FPS) Finance: The FPS Finance issues circulars that provide further interpretations and guidelines for the application of the legislation. These documents help with the practical application and interpretation of the tax rules by employers and taxpayers.
A fuel card, a charging station or an electric supply contract for the company car provided by the employer is perfectly possible in the current tax system and has been in use for decades. The costs of the company car, fuel or electricity are borne directly by the employer.
It is under this heading that STROOHM offers a solution to employers to offer their charging solution including an electricity supply contract in accordance with the current tax system. Thanks to this solution, there are many additional benefits such as VAT recovery, green energy certificates, direct invoicing so that there is no longer any difference between the currently paid rate and the CREG rate from the past for the employee, capacity rate that runs separately and cost optimization thanks to dynamic hourly rates. You can read more about this in our specific blog.
There are 3 types of solutions for home charging (back) to be paid. The entire sector is fixated on 1 part while there are 2 others that are a solution! STROOHM has a solution to formalize CREG rates, but also has a cheaper alternative with a provision.

2: Reimbursement of Actual Costs

Another option for employers is to have employees advance actual costs, which are then reimbursed. This system must comply with some strict rules to prevent tax fraud.
Procedure: The employee incurs costs for work-related expenses and submits a detailed cost statement to the employer. The employer reimburses the actual costs based on the submitted evidence. This may include travel expenses, representation costs, parking costs and other work-related expenses such as advances for electricity at home.
Tax Treatment: For the employee, these reimbursements are not taxable, as they are considered a reimbursement of costs incurred. For the employer, these reimbursements are deductible from taxable profit, provided that the costs are necessary for the performance of the work and are sufficiently documented. However, VAT cannot be recovered because there is no invoice in the employer’s name.
Problem for home charging: When consuming electricity at home, the quantity must first be measured correctly with a calibrated MID meter. In addition to the quantity, the actual cost must also be determined. And here is the rub because under this fiscal regime it is almost impossible to determine what the real cost of electricity at home is. With a fixed supply contract without batteries, without solar panels and without a day-night meter this is feasible, but as soon as someone generates electricity themselves, stores it or has dynamic rates, this is practically impossible. The CREG rates are averages from the past since there is no reference electricity rate for the current month. The current answers from the tax authorities are therefore clear. But we do need legal certainty for which STROOHM proposes a solution under the third part.

3: Lump Sum Expense Allowances

A third option for employers is to pay lump sum expense allowances to employees. These allowances are intended to cover certain expenses without the employee having to provide detailed supporting documents.
Application: Lump sum allowances can be applied to various expense items such as meal allowances, travel expenses, mileage allowances and small entertainment expenses. The amount of the lump sum allowance must be reasonable and in line with the actual expenses that the employee would normally incur.
Tax Treatment: Lump sum allowances are not taxable to the employee, provided that they remain within the limits set by the government and are justified. The employer can deduct these allowances as business expenses, which results in a reduction of taxable profits. It is important that the employer establishes and adheres to a policy to avoid the lump sum allowances being considered as wages and therefore becoming taxable. Solution for home charging: In addition to a flat-rate solution for e.g. km reimbursement, the tax authorities could also officially recognize the CREG rate as a flat-rate cost that may be used to reimburse employees for charging at home. Just like a km reimbursement, this is a fairly expensive solution compared to a provision. With your own purchased car, your own purchased mobile phone or your own provided electricity, you are in most cases better off as an employer. This is also the case for electricity at home for charging the company car. But STROOHM is nevertheless strongly requesting the official recognition of the CREG rate as a flat-rate expense reimbursement for which charging at home can be reimbursed. It is important that the actual charged kWh are indicated on the basis of a correct kWh measurement. A point of attention here is that there are also systems that are based on approximate figures from the car itself and inadmissible measurement errors are found here. A correct measurement of the number of kWh consumed is of course an obligation in accordance with the expectations of the metrology department.

Conclusion

The tax system for employers in Belgium offers various possibilities to cover employees’ work-related costs. We should not blindly focus on section 2, where the actual cost must be reimbursed. This is not a solution, but fortunately there are 2 alternatives. For the sake of convenience, the employer can opt for a flat-rate solution at the CREG rate, which is a market average cost from the past. Just like a flat-rate km allowance, this is not the cheapest solution. In addition, you can provide your employees with an energy contract, which has many financial and sustainable advantages. This way, you are assured of 100% green origin and you support the energy transition while you easily save 30% on costs.
By correctly applying these tax rules, employers can optimize their costs and at the same time relieve their employees of the burden of capacity tariffs and incorrect reimbursements. The 2 regimes can also perfectly coexist within the same company, as is the case with other benefits.