Company bicycle as a freelancer: deduction, VAT and 7% addition

How the company bicycle works

If the bicycle is on the business, the purchase (through depreciation), maintenance, insurance and for example a battery are all business costs. If you buy the bike with VAT on the invoice, you reclaim that VAT to the extent of business use. This also applies to e-bikes and speed pedelecs, which are very popular for commuting and client visits.

If you also use the business bicycle privately, a fixed addition of 7 percent of the original list price applies per year. For a 3,000 euro e-bike that is 210 euros per year added to your profit. At the top rate that costs you less than 105 euros of tax per year, while you deduct all costs. Compare that with the 22 percent addition for a car and the advantage is clear.

Keeping the bike private: 0.25 euro per kilometre

If you keep the bicycle private, you may deduct 0.25 euro from your profit for every business kilometre, exactly as with a private car. Cycle 2,000 business kilometres a year and that is a 500 euro deduction, with no addition and no cost administration. For an inexpensive bike with little business use, this is often the simplest route.

Which is better for you?

The rule of thumb: the more expensive the bike and the more business use, the sooner the business option wins. For an expensive e-bike or cargo bike used daily for work, the cost deduction and VAT refund quickly outweigh the low addition. For a city bike of a few hundred euros, the kilometre deduction is often just as good, but much simpler. If in doubt, have it calculated with your own numbers.