The tax benefits of bike leasing for employers

Are you considering offering bike leasing to your employees? Our advice is: go for it!

In Belgium, bike leasing offers many tax advantages for employers. In this blog post, you'll find out exactly what these tax benefits are.

Leased bicycles are 100% deductible

Yes, you read that right: if you’re a company leasing a bike, you can get a 100% tax deduction on it. And that’s not just on the lease rate. All the 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 bicycle shed
• the cost of installing changing rooms and showers
• the cost of bike allowance

Less social security contributions

If you offer bike leasing to your employees, you will also have to pay less social security contributions. Provided, however, that the leased bicycles are actually used for commuting and are not just used privately.

In this case, the bicycles are not considered to be a benefit in kind. As a result, you do not have to pay employer contributions for employees who lease a bike. In addition, your employees do not have to pay tax on the benefit in kind of their leased bikes.

You can recover part of the VAT

If you offer bike leasing, you can also reclaim part of the VAT on the bicycles. The exact amount you can reclaim depends on how the bikes are used. 

For example, you can only reclaim VAT on the percentage of the time the bikes are used for business purposes. This includes cycling to customers or between branches/offices.     

In Belgium, commuting is NOT considered business travel, but private travel. As a result, the percentage of VAT you can recover is quite low. 

Therefore, it must be said that VAT recovery for leased company bicycles is not calculated in an interesting way. Company cars, for example, are subject to a flat-rate deduction of 35%. A flat-rate deduction has not (yet) been introduced for bicycles.

You save a lot of vehicle costs

Besides company bikes, company cars are also tax deductible. But cycling is always more advantageous than driving a car. 

As was mentioned before, bike leasing is 100% tax deductible for companies. This does not apply to company cars. 

For example, lease and fuel costs for new diesel, petrol and hybrid cars are no longer fully deductible. In addition, the cost of building or renting parking spaces is not deductible at all, whereas the cost of building a bike shed is. 

 

What are the benefits for your employees?

Leasing a company bike also has many benefits for employees. These include both health and tax benefits. 

You can read more about the benefits of employee bike leasing in one of our other blog posts.

Want to know more about bicycle leasing?

At Alphabet, we can help you get started. Explore our bike leasing options or contact us for more information.