Unfortunately, it is not only tax advantages for self-employed people with a company e-bike that are raining down. Since 2020, a fixed addition of 7% for private use applies. This means that each year, you have to add 7% of the purchase value of the bicycle (including VAT) to your profit. This means that you pay some extra tax.
Calculation example one-man business e-bike
To calculate your financial benefit, let’s look at the same example as above, but this time in the case where you put the e-bike on the company. So, you buy another BESVCT1.1 for € 3,299 and use it for five years for your business miles. Then the math becomes as follows:
- You can reclaim 21% VAT, which comes down to 21/121 x € 3,299 = € 573 (round up in your favour!)
- You may deduct the purchase price of € 2,726 from your profit in 5 years.
- With the KIA you can deduct 0.28 x € 2,726 = € 763 once for tax purposes.
- Per year, you add 0,07 x 3,299 = € 231 to your profit. In those 5 years you have a total of € 1,155 in addition to your profit.
- On balance, you can deduct in 5 years 2,726 + 763 – 1,155 = € 2334 from the profit. This means that in total (in case you are in the lowest bracket) you will pay 0,371 x 2334 = € 866 less in income tax.
In short: when you buy your new CT1.1 on a business basis, you get € 573 in VAT back and € 866 in income tax. As a result, your new e-bike as a self-employed person will eventually cost you just € 1,860, just over half the purchase price.