Starting from the 2024 income year, a significant change will be implemented regarding the benefits in kind for company bicycles. According to circular 2024/C/22, it will be necessary to list the benefit of all company bicycles on tax forms. This measure will allow the tax administration to directly access the information needed to tax this benefit for workers and company directors who choose to declare their actual professional expenses.
What are the implications?
It is crucial that the exact value of the company bicycle benefit is reported on time, before June 30, 2024. This requirement does not change payroll calculations, as the benefit from the company bicycle continues to be exempt from withholding tax under certain conditions. However, it requires an administrative adjustment from employers, who must now evaluate and declare this benefit for each bicycle provided.
Reason for this new obligation
For employees or directors who opt for the flat-rate deduction of professional expenses, the company bicycle benefit remains exempt under specific conditions. However, for those who declare their actual professional expenses, this benefit becomes taxable starting in 2024. This new declaration requirement allows the tax administration to immediately adjust taxation.
Impact on withholding tax
The distinction between flat-rate and actual professional expenses is made during the tax assessment, not at the initial salary calculation stage. If certain conditions are met, the company bicycle benefit and the bicycle allowance are not subject to withholding tax, thus benefiting from a tax and social exemption, regardless of the declaration method chosen by the employee.
Exemption under conditions
For the company bicycle benefit to be exempt, it must be effectively used for home-to-work commutes. Similarly, the bicycle allowance must be strictly granted for commutes actually performed by bicycle between home and the workplace. It is advisable to have workers sign a declaration confirming this use.
How to evaluate the benefit value?
The evaluation of the benefit must be based on the actual value of the bicycle, taking into account the purchase or leasing costs, including accessories and associated services such as maintenance and insurance.
Implementation
This declaration obligation applies to all bicycles provided since January 1, 2024, as well as to all bicycle allowances awarded since that date.
Source: Circular 2024/C/22 on the exemption of the bicycle allowance and the benefit resulting from the provision of a company bicycle and the professional expenses related to the use of the bicycle for home-to-work commutes.
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