Due to changes in legislation, the following content is no longer applicable.

Energy supplier Luminus recently concluded a ruling with the tax authorities that makes it possible for employers to offer green electricity to their employees at an advantageous price.

The agreement is based on the existing lump-sum benefit in kind for the provision of electricity to employees (Article 31, second paragraph 2° and Article 36, §1 of the Income Tax Code). The lump-sum benefit amounts to EUR 470 per year (EUR 1,030 for executives and company directors). This means that if the employer pays an energy budget of EUR 900, the employee only pays taxes on the lump-sum benefit of EUR 470 and the employee can therefore enjoy a net optimisation of EUR 230 (i.e. EUR 430 x 53.50%).

The employer can offer this as an additional benefit or include it in a cafeteria plan (for example, in exchange for another budget). Besides the tax optimisation, for an employer it is a nice way to support homeworking and to facilitate the step to electric cars and 'green' electricity. There is even the possibility to make use of green energy produced by the employer himself through, for example, a wind turbine or solar panels. The employee can determine the energy budget himself. The surplus is invoiced directly to the employee.

Although this can be a nice additional benefit in a cafeteria plan, it is useful to dwell on a number of points. First of all, the full amount of the energy budget is subject to social security contributions. This means that there is a different benefit for taxes and social security.

In certain cases, an adjustment will also have to be made. For example, if the actual consumption is lower than the energy budget, an adjustment must be made, resulting in additional administration. In many cases it will be difficult for the employee to estimate the energy budget correctly.

In addition, the employer can offer the employee little choice, as there is currently only one provider offering this service and Luminus also limits this to one product. In addition, comparing energy prices on the market is still no easy task. We do expect other providers to follow. After all, the tax road has now been paved and it will become easier to conclude a ruling.

Furthermore, the lump sum for executive staff is a lot higher (EUR 1,030) and this will probably not lead to much optimisation for them.

Finally, we also suspect that the provision of electricity will have an impact on the home-working allowance. The recent circular letter 2021/C/20 stipulates that the administration will only accept the lump sum if the employer does not intervene in the office expenses in any other way. The charging of a part of the electricity costs is taken as an example. Therefore, the lump-sum home-working allowance will probably have to be reduced for those employees. On the one hand, this reduces the optimisation, and on the other hand, it results in more administration.