Electromobility and VAT

Please find our previous article on Electromobility from a tax perspective.

The issue of the application of VAT rules by recharging EV was discussed by an advisory committee at the European Commission, specifically by the VAT Committee, which was established to ensure uniform application of the provisions of the VAT Directive. Since it is only an advisory committee (without legislative powers), it is necessary to understand its conclusions on the given issue as solely recommendations for the Member States, which are not legally binding.

The main issue addressed was whether, the recharging of EV should be treated as a supply of goods or as a supply of services and where such supplies have the place of taxable supply. There were examined transactions between following actors:

• the infrastructure operator (provides a set of goods, namely electricity, and services, such as remote reservation, provision of information on whether terminals are occupied, on their location or on the type of socket as well as the recharging service);
• the mobility operator (offers above specified goods and services to its customers on the basis of its own subscription arrangements); and
• customers (non-taxable person or taxable person).

The VAT Committee came to conclusion that the set of different activities carried out by the infrastructure/ e-mobility operator constitute a single supply, with the main supply being the recharging of the EV. Thus, the main supply is to be qualified as a supply of electricity (i.e., supply of goods).

Further, the VAT Committee concluded that infrastructure operator supplies electricity and ancillary supplies to the e-mobility operator who in turn supplies this electricity with ancillary supplies to the driver of EV. Accordingly, the supply provided by the infrastructure operator to the e-mobility operator should be subject to VAT where the taxable dealer (e-mobility operator) has registered seat of his business, however; the subsequent supply electricity (and related ancillary supplies) carried out by the e-mobility operator to the driver should be deemed to take place where the customer effectively uses and consumed the goods (i.e., at the location of charging terminals).

The brief overview can be found in the table below.