As an entrepreneur, you, your goods or your materials will need to be transported once in a while. In some cases it could be a good idea to purchase a vehicle yourself. Next to the obvious choices like a car or a bike there is another option for your business: a motorcycle. But how do tax rules apply here?
Basically you can bring in any type of vehicle as a business asset. A car, bike, motorcycle, scooter, boat, you name it! As long as the vehicle meets the standards the tax authorities (De Belastingdienst) holds for an investment. This means it has to be a durable business asset that you’ll use for a couple of years and the purchase value is at least 450 euro (excluding VAT).
Keep in mind there are only two instances where you can list a motorcycle as a business asset:
1. At the start of your business.
2. At the moment you buy the motorcycle.
You do have to really use the motor cycle for business for at least 10%, else it’s not a business asset. You can account for it by keeping track of your kilometres. So make sure you write down your mileage.
Once the motorcycle is a business asset you can enter all related costs as business costs to your administration. For instance fuel costs, maintenance and repair costs, road tax, insurance, motorcycle gear, helmet, boots, bags and other accessories. The VAT over these costs is deductible, but only for the business part. The VAT over the purchase is also partly deductible.
You do have to make an estimate beforehand for what percentage you’ll be using the motor cycle for business. Make sure your estimate is modest or your VAT return will be bigger than you’re entitled to. Later on when the actual percentage for business use of your motorcycle is calculated, the percentage will be adjusted.
Addition and kilometer registration
Other than this the regulations are very similar to those for a car or a bike as a business asset: so when you also make private use of the vehicle you have to pay an addition. But in contrast to a car as a business asset you don’t have to base the calculations on the list price. The addition of a motorcycle is based on the real costs for private use.
Based on the kilometres you’ve registered the percentage for business use can be calculated. To do so you need the mileage when you start to use the motor or the start of the year and the end of the year. So imagine you use your motorcycle for business 25% of the kilometres and the total costs for the motorcycle are 100 euros then there’s a correction for 75 euros for private use. The business percentage is also used to calculate your VAT return.
Maybe you’re already aware of this, but just like all other business assets, the motorcycle will be written off as an investment. So each year the motorcycle decreases in value. Your bookkeeper can calculate the deduction costs and bring it into your profit and loss account.
The biggest advantage of a motorcycle as a business asset is that unlike a car you can make use of the small scale investment allowance (KIA)! If you buy an electric motorcycle you might also get an extra deduction: the MIA or the Vamil.
To sum it up: you can use a motorcycle to avoid traffic jams and get to your destination faster, but you can also use it to avoid taxes!
