The adoption of electric vehicles is on the rise among businesses and consumers, driven by the goal of reducing carbon emissions. According to the European Green Deal, the European Commission aims to have at least 30 million zero-emission cars on European roads by 2030. To support this transition, new business models have emerged that offer personalized services to electric vehicle owners. These business models focus on helping drivers find charging stations and making them easy to use. One of these models involves a charging point operator (CPO) that owns or operates charging stations, and an electric mobility service provider (EMSP) that offers subscription-based services to electric vehicle owners, such as an application for locating and reserving cargo spaces. . The EMSP bills the driver for all activities and electricity consumed.

While it is crucial that taxes, such as value-added tax (VAT), do not hinder business models that contribute to carbon reduction, there remain unanswered questions about the tax treatment of transactions between CPOs, EMSPs, and property owners. electric vehicles.

Non-binding guidance

In June 2019 and April 2021, the EU VAT Committee discussed the issue of electric vehicle charging and unanimously agreed how to deal with its key aspects from a VAT perspective. The consensus was that the overall offer of electric vehicle charging services, including remote booking, access to web portals and battery charging, should be treated as a single service for VAT purposes. It was agreed that this supply qualifies as the supply of electricity since the transmission of electricity constitutes the predominant element of the transaction.

The EU VAT system has specific rules regarding the supply of electricity. First, electricity is considered tangible property (goods). This means that a supply of electrical energy is produced when the purchaser receives the right to dispose of electrical energy as the owner. Secondly, the rules for determining the place of supply differentiate between sales to reseller taxpayers (entities that buy and resell electricity) and sales to other persons. When electricity is supplied to reseller taxable persons, the transaction is subject to VAT at the location of the reseller taxable person. On the other hand, when electricity is supplied to people who are not reseller taxpayers, VAT is applied based on the place where the customer actually uses and consumes electricity. Third, in EU cross-border situations, VAT registered companies are subject to VAT under the reverse charge scheme if they receive electricity from a vendor located in another EU country.

The VAT Committee concluded that there is an electricity supply chain from the CPO to the EMSP and from the EMSP to the vehicle owner. With respect to the place of taxation, the VAT Committee Guidelines state that the supply of electricity by the CPO to the EMSP is considered to have been made when the EMSP has established its business as an EMSP is considered a taxable distributor for VAT purposes. Regarding the supply of the EMSP to the owner of the electric vehicle, VAT will be charged where the customer uses and consumes the good, which is the location of the charging terminal. This implies that PMSCs must have VAT registrations in all countries where their charging stations are located.

While the EU VAT Committee Guidelines can offer valuable guidance and serve as a useful reference for businesses, it is important to note that they are not binding. Many EU member states have not yet issued any national legislation or guidance confirming the approach outlined in the Guidelines. Consequently, companies lack legal certainty regarding the VAT treatment of electric vehicle charging.

Although the VAT Committee Guidelines assume that the right to dispose of electricity is transferred from the CPO to the EMSP, who then transfers ownership to the driver, it is also worth considering an alternative approach where the driver obtains electricity directly from the CPO. Since PMSCs have no decision-making power or control over the flow of electricity, it is questionable whether they can transfer the right to dispose of electricity as owner to the owner of the vehicle. Additionally, for there to be an electricity supply chain from the CPO to the EMSP and from the EMSP to the vehicle owner, the services provided by the EMSP must be identical to those sold by the CPO, which is not the case.

Decision of the Court

Some of the conclusions reached by the VAT Committee were confirmed by the Court of Justice of the European Union (CJEU) in a recent judgment. The case involved a company that operated publicly accessible charging stations for electric vehicles and provided a platform to reserve charging spaces and view transaction and payment history. The company charged a single price for all of these services based on load time. The CJEU determined that, from the VAT point of view, all the services provided by the company to the users of electric vehicles are considered to be a single supply of electricity. The CJEU based this decision on the perspective of an average user of charging services, whose main objective is to recharge the vehicle. The other services provided are only means to better enjoy the supply of electrical energy. Therefore, the transmission of electricity constitutes the predominant element of the transaction, and any technical support or ancillary services (such as access to charging devices or reservation applications) must follow the tax treatment of the predominant element.

VAT in the Digital Age

If there is an electricity supply chain and PMSCs are considered to sell electricity to vehicle owners, they must have VAT registrations in all EU countries where their charging stations are located. Unfortunately, EMSPs cannot take advantage of One Stop Shop, which simplifies the tax compliance process by allowing businesses to record and report all eligible cross-border sales in their home country. As a result, conducting business in multiple EU member states creates significant VAT compliance burdens and costs. Dear suggest that obtaining a VAT registration in another member state can cost at least €1,200, with annual compliance costs ranging from €2,400 to €8,000.

The EU reform proposals under the “VAT in the Digital Age” (ViDA) aims to reduce the need for businesses to register abroad. The proposed measures will expand the coverage of One Stop Shop and remove the requirement for PMSCs to register in multiple countries. Instead, PMSCs will be able to report all their electricity sales to individuals across the EU in a single VAT return that must be submitted to the tax administration of their home country.It is important to note that EMSPs that sell electricity to companies in other member states have no foreign tax liability.These sales fall under the mandatory reverse charge rules, which means the customer is responsible for accounting for the tax.


The electric mobility sector is a rapidly evolving industry with a cross-border focus and multiple parties involved in the value chain. It is crucial to ensure that VAT does not become a barrier to future EV charging growth and does not undermine the EU Green Deal Agenda.

The EU Commission’s “VAT in the Digital Age” initiative, which includes the One Stop Shop extension for the e-mobility sector, is a welcome development as it will remove the need for PMSCs to register at all the countries where the load is made. However, more clarity is still needed regarding the VAT treatment of three-party transactions. The recent CJEU ruling did not address the classic scenario in which an EMSP acts as an intermediary between the CPO and the user. Therefore, the question remains whether there is an electricity supply chain in a tripartite relationship or whether the CPO supplies electricity directly to the user, with the EMSP merely providing services.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of any organization with which he is affiliated.

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