First EU Countries Ready To Reduce VAT On Bicycles

According to Conebi, the European cycling association, the first EU countries are preparing to reduce VAT rates, with Belgium, Portugal and Spain all taking steps to reduce VAT on bicycles. Belgium and Portugal plan to cut VAT to 6% and Spain to 10% after tax cuts. The tax cuts will take effect immediately after the EU passes VAT regulations.

In Belgium, the national parliament has passed a law reducing the VAT rate of 6.0% from 2019 on all bicycle types. The proposal, originally proposed by the Social Democrats and subsequently widely supported by parliament, will come into force in Belgium as soon as the new EU VAT regulations are decided.

Also in Portugal, its national parliament passed, as early as October 2021, recommending that the government consider a proposal to apply a reduced VAT rate (6%) to all urban and trekking bikes suitable for daily commuting, as well as equivalent conventional and e-bikes. Beginning in 2022, the proposal adds to the category of accessories for children's vehicles and trailers.

In Spain, a non-statutory proposal to reduce the value-added tax on bicycles from 21% to 10% was approved in 2018 by the Congress Committee on Road Safety and Sustainable Transport. Once the initiative has been approved, it cannot currently be implemented without EU rules passed. VAT in Spain will also change once the new EU VAT regulations come into force.

Since December 2021, the European Commission has planned to reduce the value-added tax rate on bicycles, which had hoped to achieve climate neutrality by promoting cycling. Currently Belgium, Portugal and Spain are gradually implementing this plan.