Charging electrical vehicles

By Toon Hasselman, EJP Financial Astronauts

With the European Green Deal announced in December 2019, the EU is now aiming to reduce greenhouse gas emissions from transport by 90% by 2050 compared to 1990. The most common alternate source of energy is electricity, especially for passenger vehicles.

In 2011, the EU Commission issued a policy document titled “Roadmap to a Single European Transport Area”, and many other documents have followed to facilitate the principles and goals laid out in the original white paper.

One of the major obstacles to moving ahead quickly and cheaply is the levy of VAT when the EV driver charges their vehicle. As energy is tangible property, the supply is considered to take place where it is effectively used and consumed. It seems logical that the charging event takes place at the terminal in the EU member state where the EV driver recharges their vehicle.

To recharge, an EV driver must have a contract with an EMSP (e-Mobility Service Provider) that provides the driver access to the charging terminal and other services (remote reservations, available terminals, type of sockets, parking, etc.). Thus an EMSP is deemed to provide a single composite supply, of which energy is the main component.

To support the recharging of vehicles throughout the EU, an EMSP must register in all EU member states to report local VAT due. However, this is only true when the EV driver is a consumer. When the driver is a business, in many member states a reverse charge applies if the business is locally established, and other exceptions may apply. In practice, it is nearly impossible to programme all these various options into a single billing system. The only way to avoid this is to establish either a permanent establishment or a local entity in all member states. That is a very costly and time-consuming scenario – all member states have their own invoicing requirements and reporting obligations, some expected in real time too. And not all member states have the same standards for real time reporting.

In short, the EV market is looking for special VAT measures to stimulate the growth of the EV market.

Toon Hasselman

Toon Hasselman

GGI member firm
EJP Accountants & Adviseurs
Auditing & Accounting, Corporate Finance, Tax
s-Hertogenbosch, The Netherlands
T: +31 73 850 72 80
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EJP Accountants & Adviseurs are auditors, advisers, and challengers. Their 40 auditors and international tax lawyers have a wide range of expertise. Their main fields of expertise are Dutch corporate and personal income tax, international taxation, Dutch royalty, interest and dividend withholding tax, estate planning, and wage tax. They have an AFM license to perform audits for the larger mid-size companies.

Toon Hasselman is an experienced (30 years) high-level VAT and customs specialist to both national and international companies. He provides simple and practical solutions and quick “outsidethe- box” alternatives if necessary, and promotes a no-nonsense approach with a conclusive solution at fair cost. Toon is also the Global Vice-Chairperson of the GGI Indirect Taxes Practice Group.

Published: Indirect Taxes Newsletter, No. 13 Spring 2022 l Photo: Petair -



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