E-Bike & Bike as Service Vehicle

Not only biking is good for our environment and health but utilizing a Bike or E-Bike also has its tax benefits when used as a company vehicle. For handing over a service bike to an employee, a benefit in kind or non-cash compensation will not trigger notwithstanding the extent of private use by the employee. According to the Non-Cash Remuneration ordinance, when an employer provides his employee a company bike for his disposal and the employee can use it both for business and personal matters, a non-compensation benefit will not be assessed despite his personal use. However, an Input VAT deduction can be claimed by the employer for normal bikes (when all requirements are met) and also for E-Bikes starting 2020 even if the bike was used exclusively for personal affairs. Additionally, no sales tax or VAT has to be paid by the employer.

Background: For simplicity sake, the Ministry of Finance clarified that the basis for assessing VAT in relation to the non-cash benefits to employees can be used as the basis for wage tax.  Because as per the Non-Cash Remuneration ordinance, the use of a company bike or E-Bike for not official intended trips including trips between work and home will have a zero non-compensation benefit as well as a zero VAT.

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