Buy or lease a company bicycle

What schemes are there for company bicycles?

There are 4 different tax schemes that can be used to get a bicycle, electric bicycle, or speed pedelec for your company:

• Company bicycle scheme for self-employed persons, or a bike plan for employees or directors
• Using part of the gross salary
• Allowance per kilometre
• Interest-free loan

The scheme you choose depends on your situation

• Are a sole proprietor (zelfstandige zonder personeel, ZZP)? And want to buy a company bike for yourself? You can only use the Company Bicycle scheme.
• Do you want to arrange a bicycle for your employee(s)? You can use all 4 schemes.
• Are you the director-major shareholder (dga) of your bv or nv (public or private limited company)? You can choose from all 4 schemes because you are an employee of your bv or nv.

Company bicycle scheme for self-employed professionals

You buy or lease a bicycle with your sole proprietorship (eenmanszaak). That is permitted if you will use the bicycle professionally for at least 10% of your business travel.

Because you can also use the bicycle privately, you benefit from the company bicycle. Each year, you pay an amount for this through income tax. This is called the additional tax liability, or bijtelling in Dutch. In your tax return, you include this in your profit. The addition is 7% of the recommended retail price of the bicycle.

Deductible costs for self-employed professionals

You can deduct the purchase price of the company bicycle from your profit. You do this by depreciating part of the price each year. This can be up to 20% per year. See how you calculate the amount of depreciation.

In addition, you may deduct other expenses for the company bicycle. For example, the costs of bicycle insurance, repairs, or accessories.

Deducting VAT

You can deduct VAT on the purchase cost and separate costs for the bike as input tax in your VAT return. If you also use the company bicycle for private purposes, you must determine how you deal with the VAT. Read more about VAT deduction when there is mixed use (in Dutch).

Investment credit

Are you buying a company bicycle? If so, you may be able to make use of the small-scale investment credit (KIA). This comes on top of your other deductions. Learn more about the KIA and whether you can use it.

Are you buying an electric bike for the business? Then you may be eligible for an environmental investment allowance (MIA). Learn what you need to comply with.

Company bicycle scheme for employees or directors

You buy or lease a bicycle for your employees.

For the purpose of payroll taxes, the value of the bicycle is 7% of the suggested retail price.

You add the additional tax liability to the gross annual salary of your employee. Over the amount of this addition, you withhold wage tax / national insurance contributions per tax period.

In addition, you pay the Netherlands Tax Administration employee insurance premiums and healthcare insurance contributions over the additional tax liability.

Calculation example

Keep the additional tax liability untaxed for your employee

You can also make sure that the bicycle costs your employee nothing. You do this by using the work-related costs scheme for the amount of the additional taxable benefit. You then include the amount in your payroll records as a final-levy wage, known as the eindheffingsloon in Dutch. This is salary for which you, the employer, pay the wage tax. This way, the amount remains untaxed for your employees. However, you must be under the available limit or ‘discretionary scope’ for the work-related costs scheme. Otherwise, you will pay an 80% final levy on the amount of the additional tax liability. You must state the final-levy wage in each tax return period.

Read more about the discretionary scope and the final levy at 'Calculating the final levy under the work-related costs scheme' in the Payroll Taxes Handbook (handboek loonheffingen, in Dutch).

Deductible costs for employers

Do you pay for the bicycle for your employee? Then you can deduct the costs from your profit. You do this with an annual depreciation. Find out how to calculate the amount of depreciation (in Dutch).

Is the bicycle used for commuting to and from work? Then VAT is deductible for a maximum of €130, i.e. a bike of €749 (incl. VAT). To do this, you must meet the conditions. Such as, you have not bought or leased a bicycle for your employee in the current calendar year and the 2 previous years.

Read more about the conditions (in Dutch) and view examples of permitted deductions for employee benefits (in Dutch). In other cases, you may not deduct VAT in full or at all.

Using part of the gross salary

With the gross / net allowance, your employee pays a portion of their gross income. For that portion, they receive an allowance to buy a bicycle. You indicate this allowance as the final-levy wage. You do not pay tax over this, as long as you stay within the discretionary scope of the work-related costs scheme. Because the amount is deducted from the gross salary, you and your employee pay less wage tax and premiums.

Calculation example

Tax-free kilometre allowance

Your employee can also finance the bicycle with a tax-free kilometre allowance. In that case, you reimburse your employee per commuted kilometre commuting. Reimbursements of up to €0.23 per kilometre are untaxed in 2024.

Interest-free loan

You lend your employee an amount to buy a bicycle. Because your employee repays this amount, it is not deducted from the discretionary scope. The employee can also repay the loan with the untaxed kilometre allowance.

Example

You lend your employee €1,500 for a bicycle. They will receive an allowance of €0.15 per kilometre for a home-work journey of 4 kilometres. That is a compensation of €1.20 per working day. They then repay the loan in about 5 years.