— European-level cycling groups call for quick adoption by EU member states.
An EU rule change will allow 0% VAT on bicycles and electric bicycles sales and services from the middle of 2022 — the Government is to examine if and when it might implement the measure.
Responding to questions from IrishCycle.com, the Department of Transport said that the Minister for Transport, Eamon Ryan, will be consulting with the Minister For Finance, Paschal Donohoe, on the issue.
The EU-level change is expected to be in force in around April or May 2022. It is likely that such changes if implemented locally by the Government would happen after the end of October, the month when the Government’s annual budget is announced.
Sadbh Quinn, a spokesperson for the Department for Transport, said: “The European Commission issued its original proposal to amend a [EU] Council directive on the common system of value added tax as regards rates of value added tax on 18 January 2018. The compromise text recently agreed at Economic and Financial Affairs Council has been amended significantly in comparison to the original proposal so the EU Parliament will once again be consulted for their opinion.”
The Department said that once the EU Parliament has issued its opinion on the proposal, the Economic and Financial Affairs Council will formally adopt the directive. The rule change would then come into force 20 days after its publication in the Official Journal of the European Union. Sources said that this process is expected to happen in the first six months of 2022.
“Minister Ryan welcomes the possibility to reduce the price of the repair, rental and supply of bikes and E-bikes, and he will be consulting with his colleague Minister For Finance Paschal Donohoe on the implication of the directive. Officials in the Department of Finance will be reviewing all of the options now available to Ireland in setting VAT rates,” said Quinn.
She added: “Future tax changes are generally taken in the context of the Budget. The Department of Finance prepare a series of papers containing tax options for the Tax Strategy Group to be considered in the context of the budgetary process, alongside a wide range of submissions from various stakeholders and lobby groups.”
The European Cyclists’ Federation (ECF) and the Confederation of the European Bicycle Industry, a lobby group for the bicycle industry, called the EU VAT change an important victory for EU consumers.
The ECF is an EU-level cycling campaign group, its local member group is Cyclist.ie, an umbrella group that represents most cycling campaigns in Ireland.
In a press release last week, the ECF pointed out that individual EU member states such as Belgium have already passed legislation to take advantage of the reduced VAT rates on all types of bicycles as soon as the EU’s new VAT framework is in place.
Jill Warren, CEO of ECF, said: “We very much welcome the result of the Council negotiations on the revision of EU VAT rates, which will make bicycles and e-bikes even more affordable and accessible for consumers in the EU.”
He added: “The inclusion of both conventional and electric bicycles in the list of goods eligible for reduced VAT rates adds a powerful instrument to member states’ toolbox for promoting cycling. We now call upon all EU countries to make use of this new possibility and apply reduced VAT rates for the benefit of consumers all over Europe.”
Manuel Marsilio, general manager of the Confederation of the European Bicycle Industry: “It has been a long way since we started this important advocacy campaign with ECF, but we finally see a tangible outcome.”
“This legislative decision, within the reform of VAT rates, creates 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 will support the invaluable work of our national member associations,” he said.
Kevin Mayne, CEO of Cycling Industries Europe: “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.”
He added: “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.”
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