EU Plans To Reduce Bicycle Value-added Tax

According to foreign media reports, on December 7, 2021, the European Union announced that it would allow its member states to reduce the value-added tax on bicycles to meet the requirements of the two-wheeler industry association. The new VAT rules are consistent with the EU's priorities, mainly adapting to mitigating climate change and protecting public health.

Reducing bicycle value-added tax should promote climate protection

EU member states have agreed to expand the list of existing goods and services to which the reduced value-added tax rate is applicable. New items are items that are used to protect public health and have been proven to be vital to fighting the coronavirus pandemic and may also be useful in future crises, such as personal protective equipment and certain medical equipment, as well as other necessary assistance for the disabled Items. And certain projects can have a positive impact on the EU's climate change priorities; for example, bicycles and other items deemed appropriate and useful by member states and usually serve common interests. The EU stated on their website that the value-added tax rate for these subsidized products must be at least 5 percent . The current proportion in Germany is 19 percent .

This change should not be too surprising to cycling experts, because for a long time, cycling has been considered a solution to climate change and health issues. The two-wheeler industry association also put forward a similar view in July, demanding that the value-added tax on bicycles, electric bicycles, parts and services be reduced to 7 percent .