How inexpensive is an e-bike for a self-employed person – BESV

This is how affordable an e-bike can be for a self-employed person

Are you a freelancer and are you considering buying an e-bike? Or have you just purchased an e-bike? Several interesting tax schemes are available that you can use. By making smart choices, you can save up to fifty percent on the purchase of an electric bike. Would you like to know which arrangements are most advantageous for you as a cycling freelancer? And how to calculate this benefit? Learn more in the following lines.

Tax break for e-bikes for self-employed people

Cycling has many advantages over the car and public transport. It makes people healthier, more productive and it relieves congestion on the roads and in the trains. It is therefore logical that the Dutch government encourages people to cycle more in various ways. It does so, for instance, by constructing special cycle highways and by providing tax incentives for self-employed people who cycle for business purposes.

To take advantage of the cyclist tax benefits as a self-employed person, you need to do (one of these) two things:

  • Purchasing a bicycle for private use and deducting the mileage allowance
  • Buy the e-bike for business (put it on the balance sheet) and make use of various deductions

Bicycle for one-man business

It is even more attractive if you buy the bicycle for business purposes, and thus add it to your balance sheet. This allows you to deduct the VAT, depreciation and KIA, so you pay considerably less tax. Please note that in this case you also have to pay an additional taxable benefit if you use the e-bike privately.

Deductible VAT on a bicycle

As an entrepreneur, we probably don’t need to tell you that you can directly reclaim the 21% VAT on business purchases in your VAT return. This also applies to the business purchase of an electric bicycle.

Depreciation one-man business e-bike

When you buy assets for your business – such as an e-bike – you may depreciate the purchase cost. And this depreciation you may deduct each year from the profit. For bicycles more expensive than € 450, you must write these off over five years. Are you a starter? Then you may also write off all the purchase costs in one go. Talk to your accountant about what is smart in your case!

Small-scale investment deduction (KIA)

If you invest more than € 2,400 (ex VAT) in your company in a year, you are entitled to the small-scale investment deduction, or KIA. This is an additional deduction of 28% of the total amount that you invest in a year. This also means you pay less tax.

hoeveel calorieën verbrand je met fietsen op een e-bike

Pay attention to the additional taxable benefit for e-bikes

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.

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