Business tax reduction for making a fleet of bicycles available

Verified 18 April 2024 - Directorate for Legal and Administrative Information (Prime Minister)

Companies subject tobusiness tax (IS) may benefit from tax reduction related to costs generated by the free provision of a fleet of bicycles to their employees. This can only be applied if the fleet of bicycles is used for the travel of employees between their home and the workplace, and in the limit of 25 % of the purchase or rental price of this fleet of bikes.

All companies subject to business tax (IS) may, subject to conditions, benefit from a tax reduction in respect of the costs incurred by their employees in making available free of charge a fleet of bicycles for their journeys between home and work.

Companies partially exempt from or subject to business tax may also benefit.

Companies subject toincome tax (IR) may not benefit from it.

A company may benefit from the tax reduction upon purchase of the first free bicycle of its employees.

The bikes eligible for the tax reduction are cycles (bikes without an electric motor) and cycles with assisted pedaling (bicycles with electric assistance).

The tax reduction relates to the provision of a fleet of bicycles for employees for their commuting.

This tax reduction applies to fees generated until December 31, 2027.

Please note

The company must be able to justify its employees use bicycles for their commute (e.g. via honor certificates).

The costs of providing a free fleet of bicycles for the movement of employees between their home and workplace may be taken into account in the maximum limit of 25% the price of buying or renting bicycles during the exercise considered.

This purchase or rental price is considered all taxes included (including VAT).

Example :

If the company buys a single bicycle from €400 During fiscal year N, the maximum business tax reduction will be €100 during this financial year (€400 x 25% = €100).

Please note

So the tax reduction applies only for financial years in which purchases or rental of bicycles are made.

This applies even if a fleet of bicycles is still available to employees, and other expenses linked to this fleet are incurred by the business (premises, maintenance, insurance, depreciation charge, etc.).

Example :

In the absence of a purchase or rental fee for a bicycle in a fiscal year, the tax reduction limit will then be equal to €0 for this fiscal year (€0 x 25% = €0).

To determine the upright the reduction of business tax (IS), expenditure the following committed by the company must be taken into account:

  • Depreciation allowances related topurchase of bicycles. These depreciation are usually calculated over a period of 3 to 5 years. For example, for a purchased bicycle €300 amortized over 3 years, the depreciation expenses related to the acquisition of this bike are €100 for three years.
  • Depreciation or deductible expenses related to purchase or hire of safety equipment (including helmets, pads, reflective vests, anti-theft)
  • Expenses oftheft insurance covering employees’ bicycle journeys between home and work
  • Expenses ofbicycle maintenance
  • Depreciation allowances related to the building or to theconstruction of a parking area or premises intended for bicycles. These depreciations are usually calculated over a period of 10 to 35 years.
  • Costs related to rental of a parking area or premises for bicycles
  • Expenses of bicycle rental committed by the company, if the company has entered into a contract with a lessor for the rental of a fleet of bicycles of a minimum duration of 3 years

FYI  

All eligible expenditure must be calculated by exercise.

The tax reduction applies to thebusiness tax due from the company in respect of the financial year in which the costs were incurred.

For the Member companies of a group of businesses, the calculated tax reduction by each business of the group is transferred to the parent business. It is then charged against the business tax payable by the latter in respect of the group’s overall profit.

Please note

One calculation aid sheet tax reduction fleet of bicycles can be used.

Where the amount of the tax reduction exceeds the amount of business tax due, the remaining balance shall not be neither reportable nor returnable.

Example :

In year N, a business A acquires 10 bikes for an amount of €6,000 TTC (€600 x 10). This fleet is made available free of charge to its employees for travel between home and work. The limit on tax reduction is €1,500 (€6,000 x 25% = €1,500).

For year N, the costs incurred in acquiring and making available this fleet of bicycles are as follows:

  • Depreciation allowances (bicycles): €1,300
  • Insurance costs: €100
  • Rental of a bicycle room: €90

These charges are recorded for a total amount of €1,490.

The tax reduction granted for the financial year N will be equal to the total of these costs: €1,490 (because €1,490 < €1,500).

During the year N+1, the business A acquires 2 bikes to be added to its fleet for an amount of €1,200 TTC. The limit on tax reduction is €300 (€1,200 x 25% = €300).

For year N+1, the costs totals generated by the acquisition and availability of the fleet of 12 business A bicycles are as follows:

  • Depreciation allowances (bicycles): €1,560
  • Insurance costs: €120
  • Rental of a bicycle room: €90

These charges are recorded for a total amount of €1,770.

The tax reduction granted for the financial year N+1 will be equal to the limit: €300 (because €1,770 > €300).

During exercise N+2, business A does not acquire any bicycles. The limit on tax reduction is €0 (€0 x 25% = €0).

For year N+2, the costs totals generated by the acquisition and availability of the fleet of 12 business A bicycles are as follows:

  • Depreciation allowances (bicycles): €1,560
  • Insurance costs: €120
  • Rental of a bicycle room: €90

These charges are recorded for a total amount of €1,770.

Business A receives no tax reduction for the year N+2, because the limit on tax reduction is €0 .

Companies must to declare their tax reduction on the declaration of reductions and tax credits No 2069-RCI-SD (Cerfa No 15252) within the same time limits as their declaration of results:

Reductions and tax credits for the year

This form must be transmitted via the TDFC procedure or via impots.gouv.fr.

One calculation aid sheet tax reduction fleet of bicycles is made available. It is not mandatory and does not have to be transmitted spontaneously to the administration.

Please note

In the case of businesses covered by the groups of businesses, the parent business must file tax reduction and credit returns #2069-RCI-SD of each of the businesses members of the group, including its own, when lodging the statement of the group's overall performance.