Company bicycles now exempt from social security contributions

Tax and social security treatment aligned

The benefit resulting from the provision by the employer of a company bicycle (including accessories) at no charge to the employee qualifies as an exempt social benefit from a tax point of view. For social security purposes however, there was only an exemption to the extent that the bicycle was used for professional and work–home travel. Social security contributions were thus due on the private use of the bicycle.

A recently published Royal Decree exempts the entire benefit from social security contributions as of 1 January 2018.

As is the case for tax purposes already, the concept of “bicycle” will from now on be extended, resulting in an exemption of social security contributions with regard to the provision of a speed pedelec [1]. As of 1 January 2018, the bicycle allowance for work–home travel with a speed pedelec will be exempt from social security contributions as well.

The Royal Decree of 7 February 2018 (published in the Belgian State Gazette of 27 February 2018) provides that the benefit resulting from the provision of a company bicycle (including the speed pedelec and accessories) is exempt from social security contributions as of 1 January 2018, provided that it is effectively used for
work–home travel.

From now on, the limitation to professional and work–home travel no longer applies, and the conditions for an exemption are equal for both tax and social security purposes.

The abovementioned Royal Decree also provides that the social legislation refers to the “tax definition” of a bicycle, meaning “a bicycle, a motorized bicycle or speed pedelec, as defined in the general regulation on the policing of road traffic, on the understanding that the motorised bicycle and the speed pedelec only qualify when they are powered electrically”.

This ensures that the bicycle allowance (indexed amount for income year 2018: 0.23 EUR/km) can be granted for work–home travel (including when this is done with a company bicycle – a notion which from now on includes the speed pedelec as well), exempt from social security contributions and tax.

However, with regard to the bicycle allowance for professional travel, there is still a difference. A bicycle allowance for professional travel can be granted tax free, whether or not the bicycle is the employer’s property (company bicycle). However, in its Instructions, the NSSO states that the bicycle allowance is only exempt from social security contributions if the bicycle is the employee’s property.

> Action point

As of 1 January 2018, the entire benefit resulting from the provision of a company bicycle is exempt from tax and social security contributions, provided that it is effectively used for work–home travel.

As of 1 January 2018, social security contributions are no longer due on the bicycle allowance which is granted for
work–home travel with a speed pedelec.

[1] A speed pedelec is an electric bicycle where the support does not stop at 25 kilometres per hour, as with other electric bicycles. You can reach speeds of 45 kilometres per hour by pedalling yourself.