If you commute to work by bicycle and public transport, you can accumulate professional expenditure deductions

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A, who is resident in the Canton of Zurich, makes his way to work every morning with a short 8-minute bicycle ride to the local railway station, in order to then use public transport to the destination station. All in all, the commute takes about 35 minutes. Although using a bicycle, complainant A would also be able to take the bus or even walk to the railway station.

A possesses a subscription to the Zurich Transport Association, which he claimed as a deduction for the 2014 tax year. In addition, he also declared the lump-sum deduction for the bicycle in the amount of

CHF 700. The local municipal tax office denied the deductibility of the lump-sum bicycle deduction on the grounds that it could not be a cumulative deduction but merely an alternative deduction to the subscription. A consequently raised objections, as well as a tax appeal. The Tax Appeals Court of the Canton of Zurich ruled in favour of A. However, the cantonal tax office was not satisfied and appealed to the administrative court and finally to the Federal Supreme Court (BGer 2C_745/2017 of 21 September 2017).

Classification of professional expenditures in the DBG deduction possibilities

First of all, the Federal Supreme Court explains the three different types of deductions in tax law. The organic deductions (also called generation costs) include, among other things, the costs for the exercise of an employment in accordance with Art. 26 DBG. According to the currently prevailing concept of generation costs, all «expenses incurred in generating income» are deductible. However, the Federal Supreme Court does not want to completely ignore the final definition of generation costs either. For this reason, the Federal Supreme Court pleads in favour of allowing all expenses to be deducted which are essentially caused by the generation of income (causation requirement) and which the person concerned cannot avoid (unreasonable-ness requirement).

Furthermore, the Federal Supreme Court interpreted the basis of the professional expenditure deductions in Art. 26 DBG. This standard mainly specifies the causal concept of generation costs, inasmuch as all necessary costs for journeys between home and place of work are deductible. However, the deduction is limited to CHF 3000. On this basis, an ordinance on deductions was issued by the BKV, which permits a fixed lump-sum deduction of CHF 700 for a bicycle in Art. 5 BKV.

Great freedom for taxpayers regarding the design of their commute to work

The Federal Supreme Court immediately rules out the cantonal tax administration's view that Art. 5 BKV only provides for an alternativity of deductions for public transport and private vehicles. According to the Federal Supreme Court, Art. 26 DBG as the authoritative norm is formulated very openly. In addition, it is not the task of the tax authorities or tax law per se to make provisions to the taxpayer regarding the organisation of the commute to work. The BKV merely standardises a preference in favour of public transport, by only allowing private vehicles on a subsidiary basis. Similarly, neither the law nor the ordinance provides that the journey to work must be «pure of form» (only public transport or only private vehicle).

Furthermore, in the opinion of the Federal Supreme Court, a legal basis would be required if the legislator wanted to restrict the taxpayers' freedom of action in such a way. In addition, the Federal Supreme Court is of the opinion that in practice ever longer working distances characterise the daily lives of taxpayers, which in turn makes the use of several means of transport necessary. Moreover, the judges in Lausanne cannot refrain from making a pointed remark that such a restriction would not be desirable either.

No preference for walking or bus rides over using the bicycle

The consolidation into a lump sum of CHF 700 is also legally unobjectionable - such are absolutely necessary in the tax law as mass case law. However, this does not mean that the cumulative granting of the deduction is inadmissible. Since the BKV only has a guiding preference with regard to the relationship between public and private transport, but not between cycling / bus travel / walking, these three variants are to be regarded as equivalent. As a result, cycling to the place of work itself is largely linked to the employ-ment. According to the Federal Supreme Court, it cannot be any different when cycling to public transport.

Based on the findings of the lower court, the Federal Supreme Court then ruled that the bicycle is preferred by the taxpayer in order to save 15 minutes compared to a walk. The Federal Supreme Court has issued a reprimand to the cantonal tax authorities regarding the fact that the taxpayer's conduct is classified as economic and ecological. By using a bicycle instead of a bus, the taxpayer contributes to the fact that public transport does not need to be expanded further. According to the Federal Supreme Court, CHF 700 is then a relatively small deduction, which indicates a generous tax practice.


In this decision, the Federal Supreme Court criticises the Zurich tax authorities and vividly dissects their views on the deductibility of professional expenditures. As long as the taxable person uses a private vehicle (in this case a bicycle) in addition to public transport, a cumulative deduction can be claimed. However, this is different if the taxpayer uses the private car, although the use of public transport would be reasonable.

In this case, the legislation clearly allows only a limited deduction in the amount of the costs of public transport. For the benefit of the roads and the environment, this preference is arguably justified. Nevertheless, the deductibility remains dependent on the circumstances of the individual case and, as so often, leaves the tax authorities and the judge a margin of discretion.