Are you considering offering bike leasing to your employees? Our advice is to go for it!
In Belgium, bike leasing provides employers with many tax advantages. Read on to find out exactly what these benefits are.
Leased bikes are 100% deductible
Yes, you read that right. If your company leases a bike, you can deduct 100% of the cost from your taxes. That’s not just for the lease rate, either. All costs associated with leasing a bike are also fully deductible. These costs include:
- the cost of charging electric bikes
- the cost of installing charging infrastructure for electric bikes
- the cost of building a bike shed
- the cost of installing changing rooms and showers
- the cost of a bike allowance
You have to pay fewer social security contributions
If you offer bike leasing to your employees, you will also pay lower social security contributions. This applies, however, only if the bikes are actually used for commuting and not just for personal use.
In this case, the bicycles are not considered a taxable benefit. Consequently, you will not have to pay employer contributions for employees who lease a bike. Additionally, your employees will not have to pay taxes on the benefit of their leased bikes.
You can recover part of the VAT
If you offer bike leasing, you can reclaim some of the VAT on bikes. The exact amount depends on how the bikes are used.
For instance, you can only reclaim VAT on the percentage of time that the bikes are used for business. This includes cycling to customers or between branches/offices.
In Belgium, however, commuting is not considered business travel but private travel. Consequently, the percentage of VAT that can be recovered is quite low.
Therefore, it must be said that the way VAT is recovered for leased company bicycles is not interesting. Company cars, for instance, are subject to a flat-rate deduction of 35%. A flat-rate deduction has not yet been introduced for bicycles.
You can save on vehicle costs
As mentioned earlier, bike leasing is 100% tax deductible for companies. However, this does not apply to company cars.
For instance, the lease and fuel costs of new diesel, gasoline, and hybrid cars are no longer fully tax-deductible. Additionally, the cost of building or renting parking spaces is not deductible, whereas the cost of building a bike shed is.
