EU Council makes VAT cut on bicycles and e-Bikes, plus repair
Consumers across the EU will benefit from a reduction on the price of their bicycles and electric bikes thanks to a significant piece of policy reform trimming the VAT to be paid.
On December 7th the Council of the EU revealed a “modernised” VAT directive that considered the rates applicable across a range of goods. Within this were a limited number of changes, but those that did make the cut were designed to assist the transformation of the digital economy, but also stimulate other EU agenda priorities.
The inclusion of cycles and electric bikes comes on the back of joint advocacy from the European Cyclists’ Federation and trade umbrella CONEBI. A joint position paper was created arguing the case and the pair lobbied with Commission and member state officials to outline the obvious benefits of active travel both to the economy and to reducing pollution and congestion in the transport network.
Member states’ governments have now specifically agreed to add VAT rate trims on the supply, rental and repair of bicycles and electric bikes where cut rates can be applied. Previously electric bikes were categorised alongside transport forms powered by fuel, oil and gas and thus subject to at least a 15% VAT rate.
Alongside this, Belgium passed specific legislation of its own around VAT reduction on cycles.
Kevin Mayne, CEO of Cycling Industries Europe said of the win: “This result shows once again the importance of long-term, well-resourced, professional advocacy for the cycling sector at national and EU level. The work can be slow and highly technical, but the impact is potentially huge. When this campaign started, CIE was a voluntary Industry Club supporting ECF and, as we have transitioned, it has been an absolute priority to make sure these ongoing campaigns are properly resourced and that we are coordinated with our colleagues. Today, we see another success from these partnerships, and there are more to come.”
The legislation will now come into force as soon as the European Parliament has made public its non-binding opinion on the proposed changes.
Jill Warren, CEO of the European Cyclists’ Federation said: “We very much welcome the result of the Council negotiations on the revision of EU VAT rates, which will make bicycles and e-bikes even more affordable and accessible for consumers in the EU. The inclusion of both conventional and electric bicycles in the list of goods eligible for reduced VAT rates adds a powerful instrument to member states’ toolbox for promoting cycling. We now call upon all EU countries to make use of this new possibility and apply reduced VAT rates for the benefit of consumers all over Europe.”
In the UK the same changes to VAT have been lobbied for within the industry and, according to CI.N’s current annual market research, 55% of bicycle retailers believe such a legislative change could provide the much needed boost to growing cycling numbers needed to reshape the transport picture.
Further detail on the changes can be found here.
