Reimbursement of Charging Costs: CREG Tariff vs. Actual Costs
Charging electric company cars at home raises the question of how the employer should handle reimbursement. In Belgium, two possible methods are circulating: reimbursement based on the CREG tariff or actual costs. Let's take a closer look at these options.
CREG TARIFF
The CREG tariff is an average electricity tariff published by the Commission for the Regulation of Electricity and Gas (CREG), which is adjusted monthly and varies by region. The CREG tariff should not be confused with the VREG tariff. CREG is a national Belgian authority, while VREG is a Flemish authority. Employers can choose to use the CREG tariff for the reimbursement of home charging costs. EV Belgium has also been advocating for a clear legislative framework for years.
EV Belgium considers the CREG tariff a legally secure and simple solution that is practically workable for drivers, employers, leasing companies, service providers, and the government. Various other solutions exist but are incomplete, require additional investments, or are not yet technically feasible on a large scale.
Advantages:
– Simplicity: Using a standard tariff significantly simplifies administration.
– Consistency: The tariff is updated monthly and provides a reliable basis for reimbursement over a longer period.
Disadvantages:
– Deviation from actual costs: The CREG tariff can sometimes be higher or lower than actual costs, leading to minor differences in compensation for the employee.
– Less accurate: The tariff does not take into account individual differences such as self-generated energy.
ACTUAL COSTS
The actual costs are the exact amount the employee pays for the electricity used to charge the company car at home. This can be difficult to calculate due to the various tariffs and charges on the electricity bill. Additionally, other factors, such as solar panels and batteries, can influence the actual costs. Reimbursement based on actual costs requires accurate monitoring and administration.
Advantages:
– Accuracy: The employee is exactly compensated for the costs they actually incur.
– Transparency: Clear insight into actual costs can help with cost management and budgeting.
Disadvantages:
– Complexity: Calculating and verifying the actual costs is administratively intensive.
– Variability: Actual costs can fluctuate due to changes in energy prices or the use of self-generation such as solar panels.
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EV Belgium strives for a solution that closely aligns with existing practice and the current fiscal system for company cars. This creates clarity and avoids additional costs for new software implementations. Reimbursement is calculated based on:
– The CREG reference tariff €/kWh (all-in residential) as a maximum tariff multiplied by the actual consumption measured by the service provider in kWh on a monthly basis. Depending on the employee's place of residence, the reference tariff for the respective region is used.
– The employer is free to reimburse a lower amount per kWh or set a lower fixed maximum reimbursement, for example, on a monthly or quarterly basis.
CONCLUSION
For fleet managers, it is important to find a balance between administrative simplicity and accurate cost reimbursement. Using the CREG tariff offers convenience and consistency, while reimbursement based on actual costs provides more accuracy and fairness. It is essential to make clear agreements and communicate them transparently within the company to protect both the employee and the employer and to comply with regulations.
The CREG tariff is an average electricity tariff published by the Commission for the Regulation of Electricity and Gas (CREG), which is adjusted monthly and varies by region. The CREG tariff should not be confused with the VREG tariff. CREG is a national Belgian authority, while VREG is a Flemish authority. Employers can choose to use the CREG tariff for the reimbursement of home charging costs. EV Belgium has also been advocating for a clear legislative framework for years.
EV Belgium considers the CREG tariff a legally secure and simple solution that is practically workable for drivers, employers, leasing companies, service providers, and the government. Various other solutions exist but are incomplete, require additional investments, or are not yet technically feasible on a large scale.
Advantages:
– Simplicity: Using a standard tariff significantly simplifies administration.
– Consistency: The tariff is updated monthly and provides a reliable basis for reimbursement over a longer period.
Disadvantages:
– Deviation from actual costs: The CREG tariff can sometimes be higher or lower than actual costs, leading to minor differences in compensation for the employee.
– Less accurate: The tariff does not take into account individual differences such as self-generated energy.
ACTUAL COSTS
The actual costs are the exact amount the employee pays for the electricity used to charge the company car at home. This can be difficult to calculate due to the various tariffs and charges on the electricity bill. Additionally, other factors, such as solar panels and batteries, can influence the actual costs. Reimbursement based on actual costs requires accurate monitoring and administration.
Advantages:
– Accuracy: The employee is exactly compensated for the costs they actually incur.
– Transparency: Clear insight into actual costs can help with cost management and budgeting.
Disadvantages:
– Complexity: Calculating and verifying the actual costs is administratively intensive.
– Variability: Actual costs can fluctuate due to changes in energy prices or the use of self-generation such as solar panels.
!!! RECOMMENDATION EV BELGIUM !!! (READ MORE HERE)
EV Belgium strives for a solution that closely aligns with existing practice and the current fiscal system for company cars. This creates clarity and avoids additional costs for new software implementations. Reimbursement is calculated based on:
– The CREG reference tariff €/kWh (all-in residential) as a maximum tariff multiplied by the actual consumption measured by the service provider in kWh on a monthly basis. Depending on the employee's place of residence, the reference tariff for the respective region is used.
– The employer is free to reimburse a lower amount per kWh or set a lower fixed maximum reimbursement, for example, on a monthly or quarterly basis.
CONCLUSION
For fleet managers, it is important to find a balance between administrative simplicity and accurate cost reimbursement. Using the CREG tariff offers convenience and consistency, while reimbursement based on actual costs provides more accuracy and fairness. It is essential to make clear agreements and communicate them transparently within the company to protect both the employee and the employer and to comply with regulations.
