As a business owner, you can enjoy several benefits by using a bicycle for professional travel. Whether you choose an electric bike or a folding bike, there are plenty of tax options and deductions available.

This article discusses everything you need to know about cycling costs within your business, including bike allowance, tax-free allowances, the benefit all nature and whether cycling costs are deductible for your company or as a self-employed business owner.

First, what do we mean by bicycle?

In the tax sense, the term bicycle can refer to a regular bicycle, an electric bicycle, or even a speed pedelec. It is important to note that the tax authorities have set different serious standards for the deductibility of these bikes, depending on their professional use.

A bicycle becomes fiscally interesting when it is used for professional travel, for example, commuting or professional travel.

Buying an (electric) bike: privately or through your company?

When buying a bike, especially an electric bike, you can choose to buy it privately or through your company. The advantage of buying through your company is that the cost is often tax deductible, provided the bike is used for professional use. The VAT on the bike may even be deductible unless the bike is also used for private use.

If the bike is purchased through the company, the actual value of the bike can be deducted from the company's taxable income. Associated expenses such as maintenance, insurance and bicycle accessories can also be entered as actual professional expenses.

What about the benefit all nature of a bike and private use?

It is since January 2017 that the private use of a bicycle provided by an employer is completely exempt from taxes. This means that as an employee, you do not have to pay any taxable benefit in kind even if you use this bike privately. No social security contributions are due either, beneficial right?

Now you may ask the question, what about specific cycling clothing? If an employer provides bicycle-specific clothing such as mackintoshes, bicycle helmets and fluorescent jackets to employees, then in most cases these costs are fully deductible for corporation tax, provided they are functional for commuting.

Is a bicycle business deductible?

Yes, the cost of a bicycle is tax deductible when the bicycle is used for professional purposes. This applies to both a regular bicycle and an electric bicycle or speed pedelec. However, the tax rate and deductibility depend on the percentage of private use. If the bike is used for private travel, you should exclude private use from the deductible expenses.

In addition, a flat rate can be applied for the deductibility of the bicycle depending on its use. This means that the tax authorities allow a fixed lump sum for the private use of the bicycle, which is a simplified way of deducting the actual costs.

Can I enter my bike for 100% as a cost?

If the bike is used exclusively for professional use, the full cost can be deducted as an actual cost, including VAT. This applies to both an electric bike and a speed pedelec. However, if the bike is also used for private travel, you must exclude the private use from deductibility altogether, and only deduct the professional use. The flat-rate valuation of private use applies here.

Does this also apply to electric bikes?

Yes, electric bikes are tax deductible just like regular bikes, but the rules can sometimes differ. Electric bikes, including speed pedelecs, are often seen as a more attractive alternative to the car, especially for short professional trips. The purchase of an electric bike, provided it is used for business purposes, can be fully deducted in many cases. VAT deductibility is also possible if the bike is purchased for professional use.

As a company or self-employed person, is it wise to invest in company bikes?

Investing in a company bike can be a smart move for both partnerships and independent business owners. There are several advantages:

• Tax deductions: The cost of a company bike can often be fully deducted as an actual cost, including VAT.
• Pay less tax: If you purchase the bike as a company, you reduce your taxable income, resulting in lower taxes.
• Better for health and the environment: Cycling promotes a healthier working style and reduces your company's carbon footprint.

Investing in company bicycles can therefore be fiscally interesting, especially for professional travel and for employees who need to travel shorter distances. Moreover, folding bicycles or speed pedelecs can provide a flexible solution to using a company bicycle.

What tax provisions exist for a bicycle?

The tax rules for a bicycle and bicycle allowance are clear and must be strictly followed. Important provisions include:

1. Deducting costs: The cost of a bicycle can be deducted, provided it is used for professional use.
2. Exempt bicycle allowance: Employees who use a bicycle for commuting can receive a tax-free bicycle allowance, which is an attractive option for employers.
3. Deducting VAT: If the bike is bought through the company, the VAT on the purchase can be deducted, provided the bike is not used for private use.

What is a bicycle allowance?

A bicycle allowance is an allowance that an employer can give to an employee who uses a bicycle for commuting. The tax-free bicycle allowance is an amount reimbursed per kilometre, and this amount is completely tax-free as long as it stays within set limits.

The allowance can therefore be an attractive alternative to using a company car and contributes to a sustainable mobility policy. Self-employed company managers may also be able to receive a bicycle allowance, depending on the situation.

For which types of bikes are you entitled to an exempt bicycle allowance?

You are entitled to a tax-free bicycle allowance for all types of bicycles used for commuting, including:

• City bikes
• Electric bikes
• Speed pedelecs (provided they are used for professional travel)
• Foldable bikes

The allowance is calculated based on the number of kilometres the employee travels by bicycle. The tax-free allowance is exempt from social contributions as long as it stays within the set limits.

What about bicycle allowance and public transport?

When an employee travels by both public transport and bicycle for their commute, the employer can reimburse both transport costs tax-free.

For the bicycle portion, the employer can grant a tax-free bicycle allowance of up to €0.27 per kilometre (amount for 2024), even if combined with public transport.

For public transport costs, the employer may offer a full tax-free reimbursement for train tickets, bus passes, tram or metro used by the employee

So it is possible to leave the (polluting) car to the left and bring out your ecological spirit!