Company bicycle

Local contact

EY Netherlands

22 Feb 2023
Subject Tax updates
Categories Tax

The Tax and Customs Administration has announced a more flexible way in which a company bike can be combined with a tax-free travel allowance in the payroll accounting

In practice, a company bicycle creates an extra administrative burden in situations where, in addition to a company bike, an employee also travels to work by private car, for example. For commuting kilometres by car a tax-free travel allowance may be given, but commuting using a company bike may not be provided untaxed. In practice, this means that employers must keep accurate, and sometimes laborious, records of how the employee travelled to work. This also comes into play if an employee occasionally travels to work using their own car, for example, during bad weather. 

In order to simplify the burden of proof for a fixed travel allowance for a private means of transport, the option has been offered for employer and employee to make individual agreements about how many days per week travel will be by private car and how many by company bicycle. These agreements can then be used as a basis for establishing a tax-free fixed travel allowance provided that the agreements have been tailored to the personal circumstances of the employee and are sufficiently realistic in practice.  An occasional deviation from this agreement does not mean that the fixed travel allowance also has to be changed. This simplification will be included in the next edition of the Payroll Tax Handbook.