Electric vehicle (EV) charging – chain of stakeholders

Charging an EV is not that exciting, especially for the levying of VAT. VAT is payable on the purchase of electricity at the standard VAT rate. The world behind EV charging is exciting, or at least complicated. This is caused by the fact that there are often several parties involved in the (eventually) charging of the EV. For example, the party that owns the infrastructure, the party that issues a card / app and with which one can log in at the 'pump' and then charge electricity, the leasing company and the driver of the car. These parties are all involved in a single charging session of an EV. The question then becomes, how does the VAT between these parties work when an EV is charged?

This question is not new. In fact, the discussion is already 21 years old and started with the ALH case (ECJ 6 February 2003, C-185/01). Although it concerned other fuel at the time (diesel, petrol or LPG), the question was whether the petrol station owner supplied the driver of the car, to (for example) the leasing company or to the company that issued the fuel card (e.g. Shell, DKV, Total, Esso, etc.). The outcome in 2003 was surprising, namely that the fuel is delivered directly to the driver of the car. In other words, the chain between the petrol station owner and the driver of the car was not a party to the supply of the fuel. This gave rise to the necessary challenges and problems in practice, in particular with regard to the deduction of VAT paid on the fuel. Member States have individually devised and implemented solutions, at their own discretion. This is also the case in the Netherlands.

With the rise of EVs and the infrastructure around them in terms of EV charging, this question has become topical again.

Casus Digital Charging Solutions GbmH (C-60/23)

The Advocate General (AG) at the Court of Justice recently issued an opinion in this case. We therefore expect a ruling from the Court of Justice this year. Maybe even before the summer. The most important point in the Opinion is (in short) that the AG is of the opinion that the undisclosed agent (commissionaire) fiction can be applied. On the basis of this fiction, the electricity is deemed to have been supplied to and by the parties involved in this chain. Each party in this chain can therefore deduct the VAT on the supply of electricity. If the Court of Justice adopts this opinion, it will be an important change of direction in case law and a very welcome simplification in practice. If only that the judgment and thus the application of the commissionaire fiction would have to be applied in every Member State.

In this case, and therefore also in this advice of the AG, the facts and circumstances are of great importance. In this case, for example, it is possible to separate the supply of electricity from the other services related to charging an EV. This fact is essential for the AG's advice to be able to apply the commissionaire fiction. The party that issues that card /  app and with which the driver of the car gets access to the charging station, usually provides multiple services to the cardholder. This can include administrative services, providing access to a charging network and possibly also financial services. Under certain circumstances, those services and the supply of electricity may merge into a new, composite supply. In that case, the application of the commissionaire fiction will probably no longer be possible. This fiction requires that what is purchased by the commissionaire (electricity) is passed on as such by the commissionaire. If, however, a new, composite service arises at the commissionaire, the possibility of the commissionaire fiction lapses. It remains to be seen how the Court of Justice will rule on this.

If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com