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Ever more EU States support Bikes with Tax Money

Belgium, Holland and UK have been pushing the bicycle as a healthy and environment-friendly alternative to the car with tax breaks for long. Germany's national project "Mit dem Rad zur Arbeit" has been running for 11 years. In April Italy announced an original plan to promote bikes with tax money. Now there are appeals to Brussels for EU-wide tax incentives.  

In Germany the country-wide project "Mit dem Rad zur Arbeit" (Go to work by bike) kicked off again on 2 June. The project is supported by government, labor and business and urges citizens to go to work by bicycle, rather than by car.

The project, co-sponsored by ExtraEnergy, is in its ninth year and very successful. Each year more people go to work by bike - at least for the 3-month duration of the project. In Bavaria alone 60,000 people participated in 2008, up 33% from 2007. This year citizens will also be urged to go to work by pedelec.

Although Germany has been pushing the bicycle as an alternative to the car for many years, it still has to back its call with big money.

The local government of Mannheim was the first (and still only government) to subsidize a bicycle purchase with €50. And Bike Europe magazine reported in February the Allgemeine Deutsche Fahrrad-Club (ADFC) urged other local chapters of the organization to promote the bicycle with money from the German government's economic support programme.

Projects financed from this source can, however, only be of a short-term nature (the support programme is a short-term attempt to boost the struggling German economy).

When it comes to financial support for bicycles as a healthy and environment-friendly alternative to cars, a few smaller EU countries have been the brave pioneers - with Italy the bravest of all.

In April the Italian government set aside €8.75 million for promoting green 2-wheel vehicles with subsidies of between €180 and €1,300 on the retail prices of new bicycles, e-bikes and pedelecs. The subsidies will be paid throughout 2009. According to Bike Europe, it was the first time a European government handed out money for the purchase of bicycles, pedelecs, or electric bikes.

The size of the subsidy depends on the type of 2-wheeler bought and can be as high as 30% of the retail price. For a bicycle and pedelec, the maximum subsidy is €700 for a bike with a retail price of €2,330. According to Italy's Ministry for the Environment, this is the average retail price of a high-end pedelec.

Subsidies are paid for new bicycles and pedelecs, even when old bikes are not handed in to be scrapped. Electric scooters and scooters with EURO-2, EURO-Zero and EURO-1 engines are subsidized, but in the cases of EURO-2, EURO-Zero and EURO-1 scooters, scrapping is mandatory.

In the same week as the Italian government announced its ground-breaking plan to spur bike sales, the European bike trade associations ETRA, COLIBI and COLIPED made a joint appeal to the EU Commission for an EU-wide tax break for cycling.

Using the tax system to spur bike sales and use over a long period, isn't new in Europe.

According to Bike Europe, Belgian tax laws allow (already since 1997) employers to pay employees a tax-free fee of €0.20 for every kilometer they cycle to work. Employers may decide whether they want to pay the fee and to whom. There is no obligation. Belgian government research showed cycling increased strongly when companies paid the fee, and the number of cyclists in these companies typically rose by 50%.

Many years ago, a law allowing employers to give employees tax-free bikes up to an amount of €749 was introduced in Holland. In 2008 240,000 so-called company bikes were sold (ie. almost 20% of all new bikes sold in 2008) at an average price of €836 per bike. In Holland 16 million citizens own a total of 18 million bicycles and 26% of all trips are made by bike.

In 2005 the UK government launched the “Cycle to work” tax incentive scheme, which enables employers to lend bicycles to their staff as a tax-free benefit, on condition the bicycles are mainly used to go to and from work, or for work-related purposes.

At the end of the lending period, the employee may buy the bike from the employer for a nominal sum.

Copy: Christoffel Volschenk
Photo: Susanne Bruesch: Supporters of electric mobility in Lorsch, Germany

2 June 2009



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