Home Charging Sessions Vehicles:
In contrast to regular charging sessions, there is no consensus reached at European level for employee home charging.
Originally, the prevailing interpretation was that since an energy supplier already bills a private individual for final consumption for what has been consumed at home via the electricity meter, the employer’s reimbursement is a mere contribution to the costs. However, the Belgian authorities had noted that different eMPs offered different solutions and, on that basis, provided for two possibilities in the event of an eMP. Last Miles Solutions (Threeforce BV) uses the most common scenario in which an employer calls on the eMP to reimburse the employee for electricity andwhere the eMP acts in the name and on behalf of the employer.
The other possibility implies that the eMP effectively purchases electricity from the employee in its own name and on its own account and then resells electricity to the employer. In most cases, the employee’s price to the eMP will bedeemed to include VAT not recovered by the employee (the VAT on the electricity purchased as a private individual from his energy supplier). As a result, when the eMP passes on a margin to the employer, VAT will become due on “charging sessions” calculated on an amount that includes previously unrecovered VAT. Because of this accumulation of VAT on VAT and because the VAT for the employer on these “charging sessions” is normally not deductible or deductible to a limited extent, this possibility is more expensive and therefore not preferable;
The Belgian VAT authorities have explained their position on the first possibility in their Circular 2021/C/113 “on the installation of charging stations for electric vehicles and supplies and services related to those charging stations”.
“The employer relies on the eMP to reimburse the employee for the electricity. The eMP acts in the name and on behalf of the employer.
(This is the most common scenario and is also used by Last Miles Solutions (Threeforce BV).)
Under this scenario, the role of the eMP is not only limited to reading meters, processing and forwarding the data of the electricity consumption to the employer, but the reimbursement for charging the electricity at the employee’s premises is also done via the eMP. It is contractually provided that the employer still purchases electricity directlyfrom the employee and the intervention of the eMP is limited to the financial settlement in the name and on behalf of the employer.
Article 28(5) of the VAT Code provides that sums advanced by the supplier of services in respect of expensesincurred in the name and on behalf of the other party to the contract are not to be included in the taxable amount if they are shown separately on the invoice. An appropriate mention must be made on the invoice (for example: ‘advance payment within the meaning of Article 28, 5°, of the VAT Code’). The eMP may also choose not to indicate the amount of the advance on an invoice issued for its services, but to work with a separate payment document that is not included in the VAT accounts.
According to the aforementioned circular, the remuneration that Last Miles Solutions (Threeforce BV) receives from the employer (apart from the exact amounts that are reimbursed to the employee and recovered from theemployment and that in this scenario remain outside VAT) is a service that is taxable according to the general rule for services where the customer is a taxable person. If this is in Belgium, Belgian VAT is due.
Article 21 of the VAT Code provides:
“§ 1. For the purposes of this provision and Article 21a, ‘taxable person’ means the person referred to in Article 4, ataxable person who also carries out activities or transactions which are not regarded as transactions referred to in Article 2, and a non-taxable legal person identified for VAT purposes.
§ 2. The place of supply of services to a taxable person acting as such is the place where that taxable person has established his economic activity. However, where those services are supplied to a fixed establishment of the taxable person situated in a place other than that where he has established his economic activity, the place of supply of services shall be deemed to be the place where that fixed establishment is situated. In the absence ofsuch a place of business or fixed establishment, the place of supply of services shall be the place where the taxable person who receives the services has his permanent address or usually resides.’
If the customer of Last Miles Solutions (Threeforce BV) is a person established in Belgium who is considered to be a taxable customer of the service of Last Miles Solutions (Threeforce BV) on the basis of Article 21, §1 of the VATCode, then on the basis of Article 51, §2, 1 of the VAT Code, the VAT to be paid by this customer established in Belgium is subject to VAT (VAT reverse-charged). Article 51, §2, 1° of the VAT Code states:
Ҥ 2. By way of derogation from Paragraph 1(1), the tax shall be payable:
(1) by the recipient of the service, where the supplier is a taxable person who is not established in Belgium and the service is deemed to take place in Belgium pursuant to Article 21(2);’
If the customer is not a VAT payer, the place of supply is the place of the service provider and Dutch VAT musttherefore be calculated by Last Miles Solutions (Threeforce BV) (e.g. employer is a Belgian non-taxable legal entity such as a government or public body that does NOT have a Belgian VAT identification number).
If the customer is established in Belgium and is considered a taxable person on the basis of Article 21, §1 of the VAT Code, the additional remuneration requested by Last Miles Solutions (Threeforce BV) for the intervention in the remuneration of the employees is subject to Belgian VAT by the customer established in Belgium.
After all, Last Miles Solutions (Threeforce BV) is not established in the Member State where the service takes place(in Belgium, Last Miles Solutions (Threeforce BV) currently only has a VAT number and does not have a fixed establishment for VAT purposes that intervenes in the transaction). Consequently, the reverse charge of VAT provided for in Article 51, §2, 1° of the VAT Code is mandatorily applicable.
A taxable person referred to in Article 21, §1 of the VAT Code is therefore not only considered to be a taxable person who falls under Article 4 of the VAT Code (= Articles 9 and 10 of Directive 2006/112/EC) but also a Belgian non-taxable legal entity such as a government or public body that DOES have a Belgian VAT identification number.
Articles 9 and 10 of Directive 2006/112/EC define what constitutes a VAT taxable person.
Article 9
“1. ‘Taxable person’ shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.
Any activity of producers, traders or persons supplying services, including mining and agricultural activities andactivities of the professions, shall be regarded as ‘economic activity’. The exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis shall in particular be regarded as an economic activity.
- In addition to the persons referred to in paragraph 1, any person who, on an occasional basis, supplies a new means of transport, which is dispatched or transported to the customer by the vendor or the customer, or on behalfof the vendor or the customer, to a destination outside the territory of a Member State but within the territory of the Community, shall be regarded as a taxable person.
Article 10
The condition in Article 9(1) that the economic activity be conducted ‘independently’ shall exclude employed and other persons from VAT in so far as they are bound to an employer by a contract of employment or by any otherlegal ties creating the relationship of employer and employee as regards working conditions, remuneration and the employer’s liability.”
This definition has been implemented in Belgian VAT legislation in Article 4 of the VAT Code:
‘Article 4(1). A taxable person is any person who, in the course of an economic activity, regularly and independently, whether or not for profit, principally or ancillary, carries out supplies of goods or services as defined in this Code, irrespective of the place where the economic activity is carried out.
The condition laid down in the first paragraph that the economic activity must be carried out independently shall exclude employed and other persons from taxation in so far as they have entered into a contract of employmentwith their employer or have any other legal ties creating a relationship of employer and employee as regards working conditions, remuneration and the employer’s liability.’
This definition is very broad and therefore also includes:
- taxable persons subject to the small enterprise VAT scheme
- so-called exempt VAT taxable persons who regularly supply goods or services in return for consideration but for whom a VAT exemption (without the right to deduct VAT) applies (this concerns, inter alia, a range of medical and paramedical service providers, a series of socio-cultural activities, certain real estate transactions, insurance transactions and most financial services, etc.).
- taxable persons subject to the flat-rate agricultural scheme
- public authorities and bodies governed by public law which also carry out economic activities for which they are to be regarded as taxable persons for VAT purposes
- public authorities and bodies governed by public law holding a valid VAT identification number
The abovementioned economic operators are therefore indeed taxable persons for the service received from Last Miles Solutions (Threeforce BV).
If these customers are established in Belgium and do not yet have a valid VAT number, they must, in principle, report via a document e604A or e604B that they will receive services from abroad for which they owe Belgian VAT byreverse charge. We strongly advise these customers to contact their local competent VAT management team.
They will have to communicate their Belgian VAT number to Last Miles Solutions (Threeforce BV) so that it can make a correct report for the service provided by BtoB in its Dutch intra-community declarations of “intra-community services”.
Article 53quater § 1.VAT Code: Taxable persons identified for VAT purposes in accordance with Article 50, § 1, first paragraph, 1° and 3°, or § 3, excluding VAT groups within the meaning of Article 4, § 2, communicate their VAT identification number to their suppliers or service providers and to their customers.
Also so-called:
- exempt taxable persons without the right to deduct (who only carry out transactions exempted from Article44 of the VAT Code (e.g. medical services for therapeutic purposes, financial services, insurance transactions, etc.);
- companies benefiting from the small business exemption scheme
- entrepreneurs subject to the flat-rate farmer scheme for VAT
- non-taxable legal persons (public authorities and bodies governed by public law)
If established in Belgium, they are obliged to pay the Belgian VAT by reverse charge and will need to have a valid BE VAT number.
This is evident from Article 53a, §2 of the VAT Code:
“§ 2. Taxable persons who are not identified for VAT purposes must, before a service is supplied for which they become liable for tax for the first time, declare that such a service is being supplied to them for the first time, pursuant to Article 51(2)(1).’
And from Article 53ter of the VAT Code:
‘The tax debtors referred to in Article 51(1)(2) and (2) who are not liable to the obligations referred to in Article 53(1)(1)(2) and (3° (note The VAT House: this refers to the normal periodic VAT returns) must:
1° declare taxable transactions carried out during a calendar quarter, with the exception of:
- intra-Community acquisitions of new means of transport within the meaning of Article 8a(2) by taxable persons ornon-taxable legal persons to whom the derogation provided for in Article 25b(1)(2) applies, or by any other non-taxable person;
- intra-Community acquisitions of products subject to excise duty as referred to in Article 58(1a) by taxable personsor non-taxable legal persons to whom the derogation provided for in Article 25b(1)(2) applies;
(2) pay the tax which has become chargeable within the period prescribed for the submission of that return.’
Non-filers of normal periodic VAT returns must therefore submit the VAT to the Belgian government for each quarter that they have to pay VAT. To do so, they must contact their local competent VAT management team to communicate the receipt of services for which they owe VAT according to Article 51, §2, 1° of the VAT Code, as well as to obtain a VAT number and the declaration forms.
They also have the choice to file these declarations electronically.