This goes to show once again that lobbying can pay off. Since the introduction of the work-related expenses scheme (WKR), the cycling industry has continued to campaign for an attractive tax scheme for company bicycles. And it now looks as though they are succeeding.
New regulations coming into force on 1 January 2020
This is evident from the answers from State Secretary for Finance Snel in response to questions from MP Sienot (D66). Naturally, Snel shares Sienot’s view that the (electric) bicycle is a healthy, sustainable and efficient alternative to the car. Nor is it surprising that there are far more company cars than company bicycles in the Netherlands (720,000 cars compared with 10,000 bicycles).
But does that justify a new tax scheme for company bicycles? Or has the bicycle – yes, even the electric one – now become so commonplace that (tax) incentives are no longer necessary at all? These are political questions which, as advisers, we do not need to answer. As soon as the new rules come into force, we’ll let you know how you can make the most of them.
Company bike
A tax-efficient company bike is already an option. We explain how it works in our factsheet Company bike. It is certainly not easy, but it is possible to reach an arrangement that is favourable to both the employer and the employee.
New scheme
Snel has announced a new scheme, which is due to come into force on 1 January 2020. It is not yet clear exactly what form the scheme will take. Discussions are currently taking place with the industry. It is intended to be a clear and straightforward tax measure. It could well take the form of a flat-rate additional tax liability added to the employee’s salary. It has been suggested that this could amount to 4% of the catalogue value of the bicycle (this 4% figure is derived from the additional tax liability for a fully electric company car).
We are curious to find out whether 4 in 10 Dutch people will actually cycle to work. Research carried out by the RAI Association, Bovag and Gazelle shows that this is the proportion of people who say they are willing to cycle if it is made financially attractive for them.
For an electric bike costing €3,500, €140 would then have to be added to the employee’s salary each year. The maximum tax this would cost the employee (51.95%) is just €73. However, there are quite a few days when the car really is a more convenient means of transport in the Netherlands.
And State Secretary Snel must also bear in mind that it must be attractive for employers to provide bicycles.