In recent years, more and more people are getting around again by bicycle. As an employer, you can capitalize on this by granting your employees a company bicycle. Did you know that a company bicycle also offers a number of tax advantages? In this article we take a closer look at the tax treatment.
Tax treatment for the employer
The expenses incurred by a company in providing a bicycle to its employees or corporate officers are 100% deductible.
These costs include not only the purchase price or lease payments, but also the ancillary costs that make commuting by bicycle possible. These range from maintenance and repair costs to accessories such as a bell, a bicycle pump and a helmet. Even costs incurred as part of the construction or acquisition of a locker room, sanitary facilities and bicycle storage can be 100% deducted.
In order to enjoy the tax-favored regime for company bicycles, the employee or company manager must make his or her commute by bicycle on a regular basis. As an employer, it is therefore advisable to include this as a requirement in a "bike policy.
In addition to the allocation of a company bicycle, the employer may additionally choose to allocate to its employees and company managers a bicycle allowance of up to 0.27 EUR/km (income 2023, assessment year 2024). This cost is also deductible for the company 100%.
Regarding VAT, the deduction percentage is determined based on the extent to which the bicycle is used professionally. Consequently, if the bicycle is used purely for private travel (including commuting), the VAT cannot be deducted.
Tax treatment for the employee and business manager
The employer is not required to charge any benefit in kind for the provision of a company bicycle for commuting purposes. This provision is therefore completely exempt from personal income tax and social security contributions on the part of the employee or manager. The bicycle allowance for home-work travel granted by the employer to its employees or managers is also exempt from personal income tax and social security contributions, provided the legal flat rate of 0.27 EUR/km (income 2023, assessment year 2024) is not exceeded. The above exemptions are cumulative.
Similarly, the fact that the employee or manager is already provided with a company car does not prevent him or her from also being granted a company bicycle.
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