News Article

EU VAT Reform Excludes E-Bikes from Reduced or Zero Tax

Laws & Regulations

BRUSSELS, Belgium – The European Commission recently published its proposals to reform the Value Added Tax (VAT) system. If the proposal goes ahead, Member States will be able to set reduced or zero VAT rates much more freely than currently. However, e-bikes cannot benefit from reduced or zero VAT, unlike regular bicycles. Why not?

EU VAT Reform Excludes E-Bikes from Reduced or Zero Tax
E-bikes cannot benefit from reduced or zero VAT, unlike regular bicycles.

According to the industry organizations ECF and CONEBI, EPACS or e-bikes, “have been categorized alongside transport powered by fuel, oil and gas as goods whose sale will be subjected to the standard VAT rate of at least 15%. This proposal has the potential to substantially damage the use of e-bikes.

Initiatives to boost e-bike usage

“This is a cause for concern because electric bicycles present numerous social and environmental benefits. As a sustainable mode of transport that doesn’t emit pollution, they stand to greatly contribute to the achievement of the EU’s environmental and transport targets,” both organizations wrote in a press statement. “The VAT proposals also threatens to undercut member state’s numerous initiatives that successfully boost e-bike usage.
For example, when France introduced a national purchase incentive scheme for e-bikes, a large-scale survey revealed that e-bike trips had replaced 61% of car journeys, compared to 21% by conventional bicycles.

ECF and CONEBI recommendations

ECF and CONEBI want, “the Council to extend the exemption of bicycles from obligatory standard VAT rates to e-bikes, and create a specific category for this product. This has the potential to reduce the cost of e-bikes for customers in countries with lower income levels, and is cost-efficient, with e-bikes being projected to save 4.4 billion euros in public health and CO2 emissions reduction over the next five years.”

To find out more about this issue, ECF and CONEBI’s full position paper can be found here:

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