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In this article, we go over the tax credits that are currently applicable.
A popular benefit
The tax credit is popular with employers. You pay less taxes because of it, which encourages you to give your employees a higher allowance for travelling by bike or public transport. The additional costs that such’a raise entails are thus compensated through taxes.
The government is introducing the following tax credits to promote the use of more environmentally friendly modes of transport for commuting:
- Tax credit for train season tickets
- Tax credit for compulsory bicycle allowance (collective agreement 164)
- Tax credit for voluntary bicycle allowance increase
Tax credit for train season tickets
Employees who go to work by train will in principle receive an intervention paid by their employer:
- If they are in a third-party payer scheme, the employer 80% of their season ticket and the federal state takes care of the remaining 20%. In this way, employees get 100 per cent reimbursement for their train season tickets.
- If they fall under CBA No 19/9, their employer contributes around 56% of the price of a season ticket, but the federal State does not contribute.
- Finally, if they are covered by a other collective agreement, which is more favourable, they receive a flat-rate allowance from their employer (but again, the State does not co-pay).
In certain sectors, the minimum contribution to public transport journeys will be increased from 1 June 2024. This intervention will then rise from 56% to 71.8%.
Read more: ‘Higher intervention for commuting by public transport from 1 June 2024’
In order to encourage employers to increase their reimbursement, a recent bill containing various tax provisions provides for a temporary intervention by the federal state in the cost of these trips (as is the case in the third-party payer scheme) in the form of a tax credit.
This tax credit offsets the additional cost of increasing the employer's intervention.
Concretely, the State's intervention in train season ticket costs will be a maximum of 7.5% for employers who increase their contribution to season ticket costs to at least 79.3%.
This measure is not yet official. We will inform you via Lex4You as soon as the measure is published in the Belgian Official Gazette.
Tax credit for mandatory bike allowance (collective agreement 164)
Since 1 May 2023, employees who come to work by bicycle can count on a compulsory bicycle allowance thanks to CBA 164. This collective agreement is supplementary, meaning that it does not affect the agreements concluded at sector or company level, which already provide for the granting of a bicycle allowance.
On 1 January 2024, the mandatory bicycle allowance was increased from €0.27 to €0.28 per kilometre travelled with a maximum of 20 kilometres per single journey.
Employers who have to pay a bicycle allowance based on collective agreement 164 can get a tax benefit in the form of a tax credit. This will offset the extra costs incurred by increasing the bicycle allowance.
This measure is temporary. It applies to bicycle mileage allowances for commuting trips deposited between 1 May 2023 and 31 December 2024, which were granted in a taxable period associated with assessment years 2023, 2024, 2025 or 2026.
This tax credit is valid only for allowances granted for home-to-work travel which is made by bicycle. Allowances for business travel by bicycle are thus excluded from the measure. Incidentally, it is only granted for the first 20 kilometres of the commuting journey.
Concretely, the tax credit is equal to the increase in the bicycle mileage allowance multiplied by the number of kilometres for which the bicycle mileage allowance is granted.
Read more: ‘Tax credit for bicycle allowance (collective agreement 164)’
Tax credit for voluntary bicycle allowance increase
Employees and company managers who commute by bicycle are entitled to a bicycle allowance. That allowance is exempted by the tax authorities and the NSSO up to a certain upper limit. On 1 January 2024, the maximum exempt amount was increased from €0.27 to €0.35 per kilometre.
To encourage employersto increase the bicycle allowance they pay to their employees, a temporary compensation in the form of a tax credit is being introduced.
The tax credit is temporary and only applies to bicycle allowances paid for commuting between home and work during the period from 1 January 2024 to the end of 2026 and awarded by 31 December 2027 at the latest.
It applies, incidentally, only to the facultative increases in cycle mileage allowances.
This increase must be provided for by a company collective agreement, sectoral collective agreement, working regulations or individual employment contract and applied without time limitation.
Although the tax credit is only granted on a temporary basis (more specifically for commuting between 1 January 2024 and 31 December 2026), the increase in the bicycle mileage allowance must have been agreed for an indefinite period.
Concretely the tax credit is equal to the bicycle mileage allowance increase multiplied by the number of kilometres for which the bicycle mileage allowance is granted.
Read more: ‘Tax credit for voluntary increase in bicycle allowance’
Can I combine bike tax credits ?
The tax credit for the voluntary bicycle allowance increase cannot be cumulated with the tax credit for the generalised bicycle allowance introduced by collective agreement No 164. Employers who already enjoy the tax credit for the generalised bicycle allowance can only claim the tax credit for the optional increase for the surplus of the voluntary increase of the bicycle allowance.
What does Securex do for you?
Do you have any questions about these tax credits? Do not hesitate to contact your Securex Legal Advisor at the following email address: myHR@securex.be.
If your question is about the tax credit calculation, we recommend that you contact your accounting firm.
Sources
- Constitutional Decree of 21 March 2024 laying down the modalities for the application of the tax credit for the optional increase of the bicycle kilometre allowance, BS, 29 March 2024.
- Law of 28 December 2023 containing various tax provisions, BS of 29 December 2023.
- Law of Friday 22 December 2023 containing various tax provisions, BS of 29 December 2023.
- Bill No 55/3865 containing various provisions
