European Union Agrees on Bike Tax Cuts

Brussels, Belgium

Tax concessions for e-bikes and conventional bicycles could soon be implemented in European nations, following an agreement of the Council of the European Union this month.

The agreement by the EU Council on December 7, on updated rules for Value-Added Tax (VAT), has opened the door for members states to introduce reduced rates for the purchase, rental and repair of bikes.

In response to the agreement, governments from member states have indicated they will apply VAT rate reductions.

The decision was part of a broader agreement by the Council to update EU rules on VAT rates. It included introducing environmentally-friendly goods and services – such as solar panels, electric bicycles and waste recycling services – to the list of products eligible for reduced rates.

Once the European Parliament has issued its non-binding opinion on the proposal, the Council will formally adopt the agreement and member states can implement VAT reductions.

The European Cyclists’ Federation (ECF), Confederation of the European Bicycle Industry (CONEBI) and Cycling Industries Europe (CIE) welcomed the agreement, saying it has the potential to further boost the European cycling boom by making e-bikes and conventional bikes more affordable throughout Europe.

In 2018, the European Commission published a reform proposal for VAT rates, calling for zero or reduced VAT rates for conventional bicycles and electric cars.

The proposal did not call for a similar treatment for e-bikes and they were instead categorised alongside transport powered by fuel, oil and gas, with a mandatory VAT rate of at least 15%.

The proposal prompted a joint campaign by the ECF and CONEBI, advocating for e-bikes to be treated the same way as conventional bikes, so member states could apply reduced VAT.

EU nations such as Belgium passed legislation to establish reduced VAT rates on all types of bicycles once the EU’s VAT framework would allow it.

In a statement issued by the ECF, its CEO, Jill Warren, said the inclusion of conventional and electric bicycles in the Council agreement offered a powerful instrument for member states to promote cycling.

“We now call upon all EU countries to make use of this new possibility and apply reduced VAT rates for the benefit of consumers all over Europe,” she said.

Cycling Industries Europe CEO Kevin Mayne said: “This result shows once again the importance of long-term, well-resourced, professional advocacy for the cycling sector at national and EU level.”

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