What is the tax benefit of two-wheelers? In use, the motorcycle is motorbike corporate cheaper than the car, you know. And you sneak into traffic jams. That’s not all: motorcycling generates more tax benefits than driving a car.
The advantages of motorcycling
You can deduct 100% of the expenses related to the professional use of the motorcycle.
Home-to-work travel expenses are fully deductible – The flat rate of 0.15 euro per kilometer does not necessarily apply.
The cost of motorcycle protective gear is 100% deductible (from business use).
The motorcycle and the protective equipment can be depreciated in a degressive way. (Accelerated depreciation)
The notion of professional use
In order to be able to recover part of the costs of your motorcycle from tax (depreciation, insurance, maintenance, registration and circulation tax, etc.), the vehicle must be allocated at least in part to your so-called business trips. A freelancer, for example, will ride his mount to visit his customers. As for the employee, he will use his machine to go to work. It is therefore a question of first determining the professional percentage and this proportion varies from one case to another. This same proportion will be applied for the recovery of VAT. For a self-employed person or an employee, if your two-wheeler is entirely dedicated to commuting, the professional part reaches 100%.
Please note: if you deduct your motorcycle expenses from personal income tax, this means that you are opting for the actual expenses, i.e. you will have to produce the necessary supporting documents, in particular the purchase invoices and maintenance.
And the benefit in kind?
As you probably know, the taxation of company cars changed significantly in 2012. From now on, the benefit in kind resulting from the private use of a company car will be taxed according to the list price of the vehicle and its emissions of CO2. Drivers of large and expensive cars will have to declare a taxable benefit more than double what it was under the old regime.
If you make private use of the motorcycle, your benefit in kind is not lump sum, but equal to its real value for the beneficiary, i.e. the amount that he would have had to spend under normal circumstances to obtain such a benefit (Com. IR, 36/9) . Eventually, this advantage can be evaluated according to the private kilometers traveled. In summary, a statement of the costs deducted is made annually, multiplied by the rate of private use and we obtain the benefit in kind of the user.
If the law stipulates that the flat-rate tax only concerns “passenger cars, mixed cars, minibuses and cars improperly registered as light commercial vehicles”, it is still very likely that the tax authorities will apply the same rules to a motorcycle serving company vehicle. Concretely, your employer or your company will buy or lease a motorcycle that you will have at your disposal as an employee or manager. You will use it for professional but also private purposes, to go to work or during your leisure time. In this case, for the private part of the use of the two-wheeler, you could be taxed on a benefit in kind determined according to the catalog price and the CO2 emissions of the motorcycle.
The motorcycle is tax-efficient for the employer who makes it available to his staff or manager as a company vehicle. In the event of leasing/renting (the most common formula for company cars), the tax rules are as follows:
In comparison, the company car is less attractive to society. The leasing invoice is generally deductible at less than 75% (depending on CO2 emissions). As for the VAT of the leasing invoice, it can generally only be recovered at 35% (general flat rate since 2013). And let’s not forget the CO2 tax, calculated according to the car’s emissions. For an average diesel model, the tax can quickly climb to more than 700 euros per year.
More tax efficient than the car
Compared to the passenger car, the motorcycle is much more attractive in tax terms. Indeed, motorcycle expenses have only one limit, that of the professional percentage. In other words, motorcycle costs are not affected by the 75% limit, or depending on CO2 emissions, nor by the flat rate of 0.15 euro per kilometer of home-work travel. This means that the charges (traffic tax, fuel costs, insurance premiums, etc.) are deductible without restriction provided that they relate to the professional use of the vehicle or that a benefit in kind is calculated, in society, for private use.
If you do not have the supporting documents, you can – in any case for home-work travel expenses – invoke the flat rate (less attractive) of 0.15 euro per kilometer for personal income tax. In this case, be aware that the daily mileage is limited to 200 km round trip. The flat rate of 0.15 euro includes all the costs of the motorcycle, up to the expenses for protective equipment. As a result, motorcyclists who deduct the flat rate of 0.15 euros per kilometer for their home-work journeys can no longer add the cost of their protective clothing.