Bicycles as a mean to give benefits to your employees at low cost
In order to encourage the use of bicycles, Belgium has introduced a number of fiscal measures. As a result it is very interesting for for both the employer and the employee if the employer purchases a company bike for an employee.
- 120% tax decuction of costs linked to bicycles. This is valid for bikes but also for equipement, maintenance or even workspace transformation related to the use of bicycles (bike park, shower, etc...). VAT is 100% recoverable
- The employee is not taxed on the bike/equipement he receives (unlike for a car).
- Kilometer allowance: For every km an employee rides to and from work, an allowance of EUR 0.22 can be granted by to the employee. This allowance is not taxed.
Let's take an example: You offer an electric bike to your employee worth EUR 2'250 and accessories for EUR 150. He rides 10km every day go to work and the bike is amortized in three years. You also pays for the maintenance of the bike, let's say this costs EUR 180 for three years?
For the employee:
- He receives an electric bike and accesories for EUR 2'400
- He receives bike maintenance for EUR 180
- He receives kilometer allowance for EUR 1'505 (228 days * 3 years * 10 km/day * EUR 0.22)
After three years the employee has received benefits for EUR 4'125
For the employer:
- He offers a bike and accesories worth EUR 2400. However after three years the true cost is EUR 1'849 (see bottom of page for explanation)*
- He pays for maintenance worth EUR 180. However after three years this costs him EUR 158,5 (see bottom of page for explanation)**
- He pays EUR 1'505 of kilometer allowance
The total cost for the employer is EUR 3'512
As you can see the employers pays less than what the employee receives. While usualy giving extra benefits to employees is heavily taxed, giving a bicycle is giving those benefits at a discount!
* EUR 419 of VAT are recovered. Furthermore, since the costs are deducted at 120%, 20% of extra costs can be deducted. This generates a tax discount of EUR 135. (EUR 2'400 - EUR 416 VAT - EUR 135 tax discount = EUR 1'849)
** EUR 10 of VAT is recovered (bike maintenance has usually 6% of VAT). Furthermore, since the costs are deducted at 120%, 20% of extra costs can be deducted. This generates a tax discount of EUR 11.5. (EUR 180 - EUR 10 VAT - EUR 11.5 tax discount = EUR 158.5)
- 120% tax decuction of costs linked to bicycles. This is valid for bikes but also for equipement, maintenance or even workspace transformation related to the use of bicycles (bike park, shower, etc...). VAT is 100% recoverable
- The employee is not taxed on the bike/equipement he receives (unlike for a car).
- Kilometer allowance: For every km an employee rides to and from work, an allowance of EUR 0.22 can be granted by to the employee. This allowance is not taxed.
Let's take an example: You offer an electric bike to your employee worth EUR 2'250 and accessories for EUR 150. He rides 10km every day go to work and the bike is amortized in three years. You also pays for the maintenance of the bike, let's say this costs EUR 180 for three years?
For the employee:
- He receives an electric bike and accesories for EUR 2'400
- He receives bike maintenance for EUR 180
- He receives kilometer allowance for EUR 1'505 (228 days * 3 years * 10 km/day * EUR 0.22)
After three years the employee has received benefits for EUR 4'125
For the employer:
- He offers a bike and accesories worth EUR 2400. However after three years the true cost is EUR 1'849 (see bottom of page for explanation)*
- He pays for maintenance worth EUR 180. However after three years this costs him EUR 158,5 (see bottom of page for explanation)**
- He pays EUR 1'505 of kilometer allowance
The total cost for the employer is EUR 3'512
As you can see the employers pays less than what the employee receives. While usualy giving extra benefits to employees is heavily taxed, giving a bicycle is giving those benefits at a discount!
* EUR 419 of VAT are recovered. Furthermore, since the costs are deducted at 120%, 20% of extra costs can be deducted. This generates a tax discount of EUR 135. (EUR 2'400 - EUR 416 VAT - EUR 135 tax discount = EUR 1'849)
** EUR 10 of VAT is recovered (bike maintenance has usually 6% of VAT). Furthermore, since the costs are deducted at 120%, 20% of extra costs can be deducted. This generates a tax discount of EUR 11.5. (EUR 180 - EUR 10 VAT - EUR 11.5 tax discount = EUR 158.5)
