Bicycle Leasing: New 7% Ruling

With the publication of the 2019 tax bill of The Netherlands came more clarity on the use of bicycles made available by the employer. The Fiscal greening measures bill includes a proposal which determines the value of the private use of a bicycle made available by the employer with the help of a flat rate. From 1 January 2020 an addition of 7% of the original new value of the bicycle is proposed. This will simplify the taxing of bicycles made available by employers which will therefore become more attractive.

In order to make the application as simple as possible, the tax is applicable if the bicycle is used for (parts of) commuting. No distinction is made between the different types of bicycles.

Examples
For an electric bicycle of € 2000 an annual taxation of € 140 applies (from the 7% flat rate). Based on an tax tariff of 37,05% (this person makes € 30.000 a year), this leads to a tax of € 52, or less than € 5 per month. More examples can be found below:

Lease                      Price          Taxtariff         Tax           Tax/month
Bike                        € 600         37,05%            € 16          € 1,30
E-Bike                    € 2500       37,05%            € 65          € 5,40
Speed-pedelec      € 5000       37,05%            € 130        € 10,81

Lease                     Price            Taxtariff         Tax          Tax/month
Bike                        € 600          49,5%            € 21          € 1,73
E-Bike                    € 2500        49,5%            € 87          € 7,22
Speed-pedelec      € 5000        49,5%            € 173        € 14,44

Interested?
A flat rate of 7% is expected to lead to a boost of the leasing of bicycles. The current rules are too complicated. These oblige the user to record exactly the number of private kilometers and the benefit of these kilometers. Costs for maintenance, repair and power consumption could be deducted. The proposed scheme makes it much more attractive for employers to let employees go to work on bicycles. Furthermore, especially with an electric bicycle or a speed pedelec, the high purchase price was often a barrier.

It is positively related to the changing mobility landscape as the world is increasingly focusing on finding innovative ways to cut down on emissions without giving in on speed or accessibility. Furthermore, biking to work has a number of health benefits. Both cutting down on emissions and improving the health of employees would also be benefiting the company. Has this caught your interest? Business Lease is working on propositions for the leasing of e-bikes. Feel free to contact us if you would like to know more.