Company bikes are not used. What about the tax and social aspects?
Company bikes are not used.
What about the tax and social aspects?
A few years ago, the legislator decided to encourage the use of bicycles for home-workplace journeys. Workers who use their own bicycles to get to work can receive a tax-free allowance and the benefit resulting from the provision of a company bicycle is taxed at a minimum. However, due to the coronavirus crisis, many workers do not have to commute to work. Does this have an impact?
An employer's bike
For the tax authorities and the NSSO, everything you, as an employer, grant to a worker in return for his or her services is considered remuneration. Taxes and social security contributions are therefore due if you offer the employee a bicycle. This does not, of course, really encourage the employee to give up a company car. That is why the company bicycle, made available to employees and managers, is exempt from taxes and social security contributions.
This exemption applies whatever the type of bicycle (electric bicycle, speedelec, mountain bike, etc.). It also applies to maintenance and garage costs. In addition to the bicycle, you can also grant a bicycle allowance which is also exempt from taxes and social security contributions (as long as it does not exceed 0.24 euro per kilometre).
On behalf of the employer
So that's good news for the worker, but what about the employer? Here too, the costs incurred to encourage the use of bicycles are treated favourably in terms of taxation and social security:
the purchase of the bicycle is 100% deductible (you must, however, write it off over three years);
The same applies to financial leasing;
even indirect costs (the conversion, acquisition or construction of a building to store bicycles during working hours or to provide a changing room or sanitary facilities with or without showers, the installation of solar panels and charging points for electric bicycles) are 100% deductible;
all other direct costs are also 100% deductible (maintenance, repair of the bicycle and accessories);
finally, the bicycle allowance (0.24 EUR/km) is also deductible.
In terms of VAT, the benefits are somewhat less extensive: when the employee uses the bicycle for commuting or other private journeys, the VAT is not deductible because the bicycle is not used for business purposes. It would be different if the employee used the bicycle exclusively for business trips (i.e. to cycle to customers on behalf of the employer).
Investments in infrastructure (parking, showers, etc.), on the other hand, are made for business purposes and the VAT is therefore 100% deductible.
Commuting to and from work
However, one condition must be met in order to benefit from this advantageous tax regime: the bicycle must be used regularly for commuting to and from work. It is not required that all journeys from home to work be made by bicycle. The bicycle can also be used, for example, in combination with the train (the employee goes to the station by bicycle) or even with the car (he takes his bicycle a few days a week and on the other days he takes the car).
Moreover, the bicycle must not be used exclusively for commuting to and from work. The employee may also use it for private journeys.
The bicycle must therefore, in substance, be used regularly for journeys between home and work. In practice, the employee undertakes to comply with the company's bicycle policy and is therefore obliged to use the bicycle regularly (e.g. at least twice a week).
And in these times of coronavirus?
In principle, the employee must therefore actually use the bicycle to get to work. But this is rather problematic in times of coronavirus. An obligation to telework applied in March/April and applies again in November/December. The bicycle had/must therefore remain in the garage.
In an answer to a parliamentary question, the Minister recently indicated that this was not really a problem. If, as a result of the COVID-19 measures, the number of home-workplace journeys made by bicycle is lower than the number provided for in the employer's bicycle policy, this does not mean that the exemption from the benefit can no longer apply.
On the other hand, the exemption from the bicycle allowance does relate to journeys actually made by bicycle between home and the workplace. Consequently, this exemption does not apply when the employer pays a bicycle allowance for days on which the employee works at home.