Company bicycles for entrepreneurs
Are you an entrepreneur paying income tax in the Netherlands, and would you like to cycle more often? As cycling is good for people and the environment, certain legal and fiscal benefits have been made available by the government to encourage an increase in cycling. For example, as an entrepreneur you can purchase a ‘company bicycle’. There are different conditions and regulations for different situations. Below Moneywood has provided some information on this topic.
As an entrepreneur, you can put a bicycle that you use for business purposes 'on the business'. This has implications for your income tax return and the SalesTax.
For entrepreneur’s paying income tax, there are various options for the way a company bicycle can be treated for tax purposes. Each option works slightly differently from a tax point of view. Below we have summarised how this works for each option:
You use your private bike for business trips
Have you bought your bike privately and do you occasionally ride it for business? Then you may deduct a mileage allowance for these trips from your income tax. Of all kilometers driven for business, you can claim an amount of €0.23 per kilometer (was €0.21 until 2024) as costs and deduct it from your profit. You must be able to account for these kilometers in your administration.
You don't use your company bike privately
If you purchase a company bicycle and only use it for work purposes, the bicycle applies to the company administration for income tax purposes in full. All costs related to the bicycle (such as insurance, maintenance, damage) are then deducted from your profit. There are therefore no additional costs or taxes.
You also use your company bike privately
When you buy a company bicycle and use it both for business and private purposes, costs related to the bicycle are deductible from your profit in income tax. As an entrepreneur, you can buy an (electric) bicycle for your company if you use it 10% or more for business purposes. The other use is private and you therefore have to pay 7% addition to the List price (in Dutch) of the bicycle. You declare the additional tax as profit. As with other business purchases, you can deduct the costs of the bicycle from your profit and reclaim the VAT.
Please note: if you use the bike for both business and private purposes, you can only reclaim part of the VAT as pre-tax. You can read how that works Here (in Dutch). As a self-employed person, you are not entitled to a mileage allowance.
Want to know more?
Moneywood also has articles about the tax rules for the bicycle plan for employees and DGA. If, as an employer, you want to encourage more cycling amongst your employees, you can participate in the campaign thats how you cycle (in Dutch). In this article by the NFP Group you can read more (in Dutch) about bicycle plans and tax benefits for employees (in Dutch). Maybe you would like more information about company cars and tax benefits for entrepreneurs in income tax.
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