As a freelancer in Belgium, you’re always looking for ways to optimise your expenses. So, between a company car and an electric bike, which should you choose for your business travel? It seems that the (electric) bike has the advantage from a tax point of view and much more besides. Let’s find out why.
The bicycle, a 100% tax-deductible investment for your sole proprietorship
If you’re a freelancer, an (electric) bike can be an excellent solution for your business travel. It’s 100% deductible, which means you can deduct the full cost on your tax returns. What’s more, all the costs associated with your bike, such as the purchase of a helmet, insurance, repairs and maintenance, are also 100% deductible.
However, there’s one condition: the bike must be used exclusively for business purposes. For example, to deliver sandwiches or pick up orders. If you use your bike for private journeys, you will only be able to deduct 75% of the costs. It’s important to note here that the tax authorities consider journeys between your home and your place of work as private.
Amortisation and VAT for (electric) bikes
Like a company car, the amortisation period for an (electric) bicycle is at least three years. In other words, you cannot deduct the full purchase price of your bike in one go.
There’s some good news though when it comes to VAT. The VAT you pay when you buy your bike, and on the associated costs can be deducted at 100%. However, if you use your bike for private purposes, such as going out for a drink with friends, you won’t be able to deduct the VAT on these journeys.
The Belgian government considered reducing the VAT rate on electric bikes from 21% to 6%. However, this now seems not to be the case. Therefore, the VAT on (electric) bicycles is still 21% and not 6%.
Buying or leasing an (electric) bike?
If you buy a company bike, you immediately become its owner. However, this requires a substantial initial investment.
If you lease a bike, you pay a fixed amount each month, which also includes costs such as maintenance and repairs. At the end of the contract, you can either pay the remaining amount to become the owner of the bike, or opt for a new leased bike. Leasing offers the advantage of spreading the costs and conserving cash for other investments. What’s more, leasing is tax-deductible up to a maximum of 100%.
Subsidies for buying a bike in Wallonia
In Wallonia, financial assistance is available to encourage people to buy a bicycle for business travel. This subsidy is available to any adult (or emancipated minor) resident in the Walloon region. The amount granted can be up to 20%, 30% or 40% of the purchase price of the bike, with an upper limit from €50 to €1,250 depending on the type of bike and the applicant’s situation.
It’s important to note that to qualify for this subsidy, the bike must be used for at least 40% of your journeys between home and work, or for at least 40% of your journeys when looking for work. In addition, you must have purchased your bike between 1 July 2020 and 31 December 2024. This subsidy is available until the budget allocated by Wallonia has been fully used, and only one subsidy can be granted per person.
Financing options for purchasing electric bicycles
In addition to government subsidies, there are other financing options available for the purchase of electric bicycles. For example, some banks and financial institutions offer specific loans for the purchase of environmentally-friendly vehicles, including electric bikes. Some e-bike manufacturers also offer financing plans that let companies spread the cost of the purchase over several months or years.
Commuting to and from work
As mentioned previously, the tax authorities consider journeys between your home and place of work as private journeys, meaning these are therefore not tax-deductible. However, you can declare these journeys on your personal tax return. The flat-rate allowance of € 0.25 per kilometre is generally the most advantageous. The distance of each journey may not exceed 100 kilometres.
How do you prove your bike expenses?
The best way to prove the purchase of your bike and the associated costs is with a VAT invoice. This way, you can reclaim (part of) the VAT.
So, is buying an (electric) bike a good idea for a freelancer?
In the light of the above, it would seem so. Regular bikes and e-bikes are 100% tax-deductible and the lump-sum mileage allowance is higher than for a car, making the purchase of a company bike particularly attractive. You could even combine the use of your bike with other tax-efficient means of transport, such as public transport.
However, it’s essential to look at the big picture. If you spend more time than you’d like getting around by bike, or if your customers are difficult to reach by bike, you might be better off considering a company car or a shared car.
💡FAQ: Frequently asked questions about electric bikes for self-employed in Belgium
1. What are the tax advantages for a freelancer who buys an electric bike for their business?
Electric bicycles that freelancers purchase for professional use are 100% tax deductible. This includes the cost of the bike as well as associated costs such as insurance, repairs and maintenance. In addition, VAT paid on the purchase of the bike and associated costs can also be deducted at 100%.
2. What does it mean to amortise a company bike over three years?
Amortising a company bike over three years means that you do not deduct the full cost of buying the bike in one go. Instead, you spread the cost over a three-year period, deducting part of the cost each year.
3. What’s the difference between buying and leasing a bike for a company?
When you buy a bike for your business, you immediately become the owner of the bike and you can deduct the full cost of the purchase and associated expenses. If, on the other hand, you opt to lease a bike, you pay a fixed amount each month, which also includes maintenance and repairs. At the end of the leasing contract, you can either pay the remaining amount and become the owner of the bike, or opt for a new leasing contract.
