On 7 December, the Council of the EU reached an agreement on updated rules for VAT rates. Under the new rules, Member States will be able to apply reduced VAT rates on the supply, rental, and repair of bicycles, including electric bicycles. ECF, CONEBI and CIE welcome this step, which has the potential to make bicycles more affordable for customers around Europe and can give cycling a further boost.
The European Commission had published a proposal for VAT rates reform already at the beginning of 2018. Under this proposal, conventional bicycles and electric cars could have benefited from reduced or zero VAT, but electric bicycles could not. They were categorized alongside transport powered by fuel, oil and gas as goods on whose supply the application of the standard VAT rate of at least 15% would have been mandatory.
After the publication of the proposal, ECF and CONEBI started a joint advocacy effort for electric bicycles to also be incorporated in the list of goods for which reduced rates can be applied by EU Member States. This included a joint position paper, and numerous meetings with Commission and Member States officials to create awareness of the benefits of electric bicycles for society, the environment, and the cycling economy as a whole. In the meanwhile, individual member states like Belgium passed legislation that would establish reduced VAT rates on all types of bicycles as soon as the EU VAT framework would allow for it, and supported the bicycle sector’s demands at the European level.
All these efforts have now borne fruit: In the general approach of the Council of the EU on a revision of the EU VAT rates directive, Member States’ governments agreed to add the supply, rental, and repair of bicycles in the list of goods on which reduced VAT rates can be applied, explicitly including electric bicycles. According to the special legislative procedure to be followed in this case, once the Parliament has issued its non-binding opinion on the proposal, the Council will formally adopt the directive. It will then be possible for member states to put in place VAT reductions on bicycles and e-bikes.
ECF’s CEO Jill Warren stated: “We very much welcome the result of the negotiations in the Council on the revision of EU VAT rates. The inclusion of supply, rental and repair of both conventional and electric bicycles in the list of goods on which reduced VAT rates can be applied adds a powerful instrument to member states’ toolboxes for promoting cycling, and can help to make cycling even more affordable for citizens. We now call upon member states to make use of this new possibility and apply reduced rates across Europe.”
CONEBI’s General Manager Manuel Marsilio added: ‘’It has been a long way since we started such an important advocacy campaign with ECF in 2018, but we finally see a tangible outcome. This legislative decision, within the reform of the VAT rates, opens up to a unique opportunity for governments in Europe to further support Cycling in very practical terms. Now we look forward to seeing concrete VAT reductions in all EU countries and we will support the invaluable work of our national members associations.’’
CIE’s CEO Kevin Mayne ”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.”