More and more households are purchasing electric vehicles, and we’re seeing their presence grow in company fleets. How electromobility is taxed?
Electromobility is currently enjoying a boom in popularity. However, they not only have different means of charging but also, for example, different operational billing, depreciation or rules for calculating road taxes.
At the end of last year, the Industry and Transport Association issued to this end an updated list of tax questions on electromobility. For this reason, we prepared this article to inform you of the pitfalls in the case of using electromobility in companies, including their practical use. We especially focus on the issue of taxation of electrical vehicle operation, depreciation of wallboxes and road taxes for electric vehicles.
Charging electric vehicles
Many situations may arise in reality concerning how and where an electric vehicle is charged. What does it mean when an employee recharges, for example, an electric vehicle at home? We are going to endeavour to answer these questions.
In the case of charging, there are three possibilities, which are in reality often combined. They are:
In the case of home charging, the actual costs incurred by the employee must, as stipulated by tax and employment legislation, be proven. Given the means of electricity billing, this is really not an easy task for the employee. Since 2020, an amendment to the Income Tax Act has made it possible to apply a so-called reference rate, which is based on the current Ministry of Labour and Social Affairs decree. The reference rate can be used in the case of both company vehicles and private vehicles being charged for business trips. The reference price for 1 kilowatt hour of electricity for 2022 is 4.10 CZK. The reference rate will be updated annually, always at the end of the preceding year.
Calculations of reimbursements for fuels used is based on actual distances driven, the average consumption stated in the registration certificate and the demonstrated price of bought electricity or, if applicable, the stated reference price. The requirement to keep a logbook remains, just as with a conventional automobile.
Even given the point above, an employee may claim reimbursement for costs in the proven amount. In the case of recharging an electric vehicle, this means, for example, the use a public charging station.
Let’s keep in mind that just as with the case of other travel cost reimbursements, this reimbursement is not subject to tax on the employee’s side. Nor does he/she pay social and health insurance from it.
In the given respect, attention must be paid to the difference between declared consumption of electric vehicles and the actual electricity consumption during normal vehicle operation. These may be different. Smart devices that record the exact amount of charge can be used for this purpose. If this is not possible, the Ministry of Industry and Trade recommends using the consumption stated by the producer.
In conclusion, let’s keep in mind that, if the vehicle is only charged at the employer and the employee uses the vehicle not only for work but also personal purposes, the employee will either pay for the personal consumption him/herself or this non-monetary income is additionally taxed as part of the employee’s salary, at costs equal to his/her personal journeys.
Road Tax
What is the road tax for electric vehicles? The general support of electromobility allows all vehicles that have an electric engine or hybrid engine that combines internal combustion with an electric motor to be tax exempt. In both cases, it applies to vehicles of the highest permitted weight of 12 tonnes.
Wallbox – what about them?
A wallbox is a device allowing the recharging of electric vehicles at home. Since there are no special amendments in the tax laws concerning the devices in question, said devices can be considered as:
- vehicle accessories
- personal property in itself
- parts of real estate.
This classification impacts not only the income tax but also the bookkeeping.
A wallbox as a vehicle accessory
Since there are many types of wallboxes, the specific means of claiming the purchase costs of a wallbox is determined by the specific type of wallbox. For example, with regards to a “mobile” wallbox, it is a vehicle accessory. Therefore, the employee only logs the kilometres that the employer will reimburse them for.
Let’s not forget that, if the employee uses an electric vehicle for private use, he/she is additionally taxed at 1% of the purchasing price of the automobile/electric vehicle. In this case, it means the price of the wallbox too.
Depreciation
If the wallbox is purchased jointly with the vehicle, it depreciates as a part of the vehicle’s initial price, in the 2nd depreciation category. If the wallbox is purchased subsequently and its purchase price is 80,000 CZK or under, it will be considered a one-off expense. In the opposite case, if the purchase price is above 80,000 CZK, it will be considered a technical appreciation of the vehicle.
The wallbox as personal property in itself
The wallbox may be a personal property in itself among the property of the employer and provided as such to the employees who uses it for private and work purposes. It must be pointed out that in the case of wallbox use for personal purposes, the use of a wallbox by an employee is considered the employee’s taxable income. The value of this benefit can be determined based on the purchase price of the wallbox, the field of employment and the ratio of work trip distances to private trip distances.
Depreciation
Even if it is personal property in itself, it is important to pay attention to the price of 80,000 CZK. If the purchase price is 80,000 CZK or under, the purchase price can be claimed directly in the costs, just as in the preceding case. If the purchase price exceeds 80,000 CZK, it is considered property in itself, and it must be classified into the 3rd depreciation category.
Wallbox as a part of real estate
If a wallbox is built into a piece of real estate, especially when it is directly connected to the distribution box, it becomes a part of the real estate. One of the situations that can occur is that the employer installs such a wallbox free of charge into his/her property. In this case, the procedure is similar to the preceding paragraph. The price of the wallbox that the employer paid is the taxable income for the employee, including the installation cost. If the employee paid the installation portion, the amount of the employee’s taxable income would be proportionally reduced.
We must be aware that this type of wallbox becomes the property of the employee and is a non-taxable cost for the employer. However, when recharging an electric vehicle also for business purposes, the employee may claim a reimbursement from the employer for the use of his/her own equipment. This reimbursement is not subject to the employee’s income tax or even insured.
Depreciation
A wallbox with a purchase price over 80,000 CZK that is built into a building generally counts as the technical appreciation of the building and is in the same depreciation category as the building.
Nonetheless, it is possible to take into consideration whether the wallbox forms, or not, a functional unit with the building. If the wallbox wouldn’t form a single functional unit with the building, it would be considered a separate piece of property depreciated in the third depreciation category. Therefore, all the technical and specialised circumstances. The situation is not clear-cut.
Wallbox – free-standing charging station
A free-standing charging station is a separate item of property that depreciates in the 3rd depreciation category.
Following the article as a whole, the issue of electric vehicle operation and wallbox purchase is very disparate, with many variants potentially arising in reality. Therefore, we recommend considering every situation in the given case in detail. We will be happy to assist you.
