• Cycling mileage allowance pilot project about to start in France
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  • 25.05.2014


Bike Commuter in France 2

Source: Cedric Lange,

 Following the example of its northern neighbours, the French government is considering the introduction of a tax-exemption for home-work travel by bike.  In order to study the potential of a tax-free cycling mileage allowance to increase the number of employees cycling to work, a pilot project comprising selected companies and running until December 2014 has been set up.

The pilot project was presented in March 2014 by French transport Minister Frédéric Cuvillier (Socialist Party) as part of an action plan for active transport modes, comprising 25 measures to boost cycling and walking. It will be based on the voluntary participation of companies under the current tax regime.

The main aim of the project is to verify the results of a study published in July 2013 by the French Government’s Cycling Coordination Group (Coordination interministérielle pour le développement de l’usage du vélo, CIDUV). The CIDUV came to the conclusion that an obligatory cycling mileage allowance of € 0.25/km to be paid free of taxes and contributions by all employers would lead to an increase of bike commuting by 50%. The loss of state income of € 109 million would partly be offset by a direct gain of € 35 million for the state budget realised through savings in health-related expenditures. Applying a comprehensive socioeconomic analysis shows that the social benefits of the measure (€ 570 million/year) clearly outweigh the costs (€ 170 million/year). A similar – although not obligatory – tax-free allowance has already been in place for almost 20 years in France’s northern neighbour countries, Belgium and the Netherlands.

Cycling allowance under discussion for years in France

The idea of introducing a tax-free cycling allowance or other fiscal measures in France to promote cycling to work is also not new. It had already been proposed in the national cycling plan prepared during the previous legislative period by Philippe Goujon, a parliamentarian of the right-wing UMP that was in government at this time. However, both now and then, the cyclist-friendly proposals coming from both sides of the political spectrum seem to meet fierce opposition by the Ministry of Finances, whose Directorate General of the Treasury expressed the opinion that “such a measure would risk to be contradictory to the priority of employment and the sustainability of public finances”.1

This line of argument is surprising to say the least, since commuters using other modes of transport than cycling (and walking) currently receive generous tax benefits that are all but conducive to the aim of sustainable public finances, cost the state budget a lot more than the proposed cycling allowance – and will certainly not foster a sustainable transport system. An example: Car commuters can claim expenses for income tax purposes, while cyclists cannot. These expenses even increase the higher the motor power and the CO2 emissions of the car are.

High time for a more sustainable home-work travel tax regime in France – and in Europe

The reduction of harmful subsidies for car use together with the introduction of fiscal incentives for cycling, while having an overall positive effect on the state budget, would lead to a level playing-field for the different transport modes. Statistics on the share of cycling in home-work travel clearly illustrate why this is necessary: While this share goes up to around 25% in the Netherlands, 12% in the Flemish region of Belgium and 9% in Germany, it only reaches 2.4% in France. More bikes and fewer cars used for home-work travel would help to tackle problems of congestion, pollution and public health. The imposed reduction of car use during the pollution peak in March 2014 in Paris showed the overwhelming positive impact of less urban car traffic on air quality.

ECF advocates for a fiscal level playing-field for all modes of transport throughout Europe and is currently preparing a study on different fiscal regimes in order to identify best practices.

CIDUV report on cycling mileage allowance

Call for companies to participate in pilot project

 About the Author

HO_bwHolger Haubold is ECF’s Fiscal and Economic Policy Officer. Prior to joining ECF, he worked as a trainee at the Council of the European Union and did a Master in European Studies and Economics at ULB Brussels.

Last Updated July 25, 2014