Roche & Cie

Definition of the legal and tax regime of the bicycle mileage allowance

27 May 2016

Article 50 of the Law on the energy transition to green growth adopted by Parliament on July 22 introduced a “bicycle mileage allowance” supported by employers and which yet had the amount to be determined.

The project introduces the obligation for employers to take over all or part of the costs incurred by their employees moving by bicycle or electric bike between their habitual residence and the workplace as a “bicycle mileage allowance”, the amount was to be set by decree.

The tax administration has just clarified the legal and fiscal regime of the optional support of bike costs as a bicycle mileage allowance

A. Legal regime

1. Employees  likely to be

concerned, employees moving by bicycle or electric bike between their habitual residence and their workplace. They can not, in principle, benefit from support by the employer of subscription fees to a public transportation or a public service bike rental provided for in Article L. 3261-2 of the Labour Code .

Exceptionally, the benefit of the bicycle mileage allowance for routes to public transport stops, can be combined with the support for public transit passes or bike hire public service provided for in Article L . 3261-2 of the Labour code, provided that these subscriptions do not allow for these trips (C. trav., Art. D. 3261-15-2).

2. Implementation Conditions

The management of these costs is implemented for:

– Companies subject to annual obligation to negotiate, that is to say mainly the companies with at least 50 employees in which was designated a union representative : by agreement between the employer and representatives of organizations union represented in the company;

– Other companies: by unilateral decision of the employer, after consultation with the works council or, failing that, of staff representatives if any.

The amount of the bicycle mileage allowance is 25 cents per kilometer (Labor, s. D. 3261-15-1).

B. Taxation

1. General Provisions

Part B of 19 ° ter of article 81 of the Tax Code exempts from tax the mileage allowance income within the limit of € 200 per year.
These provisions are applicable from July 1, 2015.

2. Effect of the option for the regime of expenses

Employees who choose to deduct their business expenses under the plan of the real and justified costs must add to their gross taxable income the portion of the participation of their employer in the bicycle mileage allowance exempt from income tax.