If you want to buy a very cheap bicycle, it’s easy: go to Portugal

Spain and Portugal share just over 1,200 kilometers of border, an extensive permeable ‘strip’, full of history, economy and coexistence which in 2023 the bicycle sector began to view with some suspicion from this side of the peninsula. The Association of Brands and Bicycles of Spain warned about this three years ago (AMBE) in a statement resounding statement in which he stated that this proximity and extensive border could become a poisoned gift overnight. The reason: around that time Portugal gave a severe snip the VAT that applies to their bikes.

From taxing them at 23%, they went on to apply 6%. The problem is that in Spain (and despite the requests of the sector) the same merchandise bears a VAT of 21%.

The other ‘cycle tourism’. The controversy It’s not exactly newbut The Confidential has shaken it again with an interesting article in which he warns of an apparently increasing phenomenon: Spanish cyclists who suddenly decide to take the car, travel dozens or hundreds of kilometers until crossing the border and, once in Portugal, buy a good bicycle. The reason? The savings.

Yes, they spend money on fuel and invest hours behind the wheel, but the tax differences on both sides of the border make all of that compensate. After all, in Spanish stores they pay a VAT of 21%, while in those in Portugal that rate is three times less: 6%. And that difference is more than considerable when we talk about models that cost hundreds or even several thousand euros.

“I have saved 500 euros”. The Confidential echoes several testimonies of two-wheel lovers. And they all point in the same direction: depending on where you live, traveling to Portugal may take more or less time, but it is worth it. “I got up at 4:30 in the morning. I drove five hours and crossed the border to buy a bicycle in Portugal. I spent 70 euros on gasoline, but I saved 500 euros on the bike,” says one.

Another fan, an 18-year-old Spaniard who trains at a cycling school, explains how he “tied” his father to cross the border just to get an RCR Pro, a road bike. “We saved almost a thousand euros,” he boasts on TikTok.

On the table from 2022. A quick Google search shows that these are not isolated cases. In forums, specialized blogs and social networks there is a good handful of references to the topic: cyclists interested in knowing whether or not it really pays to buy a bicycle in Portugal or what directly counts what has been saved there thanks to the VAT difference between both countries.

Not all are new comments. Some date back to the end of 2022, just when AMBE raised his voice and warned the Government of the risks of not following in Portugal’s footsteps: “We put the future of thousands of jobs, stores, brands and Spanish producers at risk,” emphasized. In his day Brussels decided give green light to countries that want to apply a reduced VAT in the sector, a measure that a priori had the endorsement of the PSOE, but which has not caught on in Spain.

Is it that common? Good question. Difficult answer. If we search on TikTok we find videos which confirm that the ‘trick’ of buying bikes in Portugal to benefit from its taxation is well known among fans. However, a more diffuse message comes from the sector. In fact, there are those who say that today it is something anecdotal, although things can change in a short time.

“We receive messages from cyclists who are going to Portugal to buy a bicycle, but the risk is that this will get worse and affect the industry,” they point out from AMBE.

Stock earrings. There would be several factors at play. Not all brands are the same, but if there is something that the sector is waiting for, it is how the market will respond when the stock accumulated after the pandemic is released, when there were a spike in sales (2020 and 2021) that deflated during the following years.

To dispose of this post-pandemic surplus, businesses in Spain have not hesitated to resort to discounts, a practice that has softened the blow of the VAT reduction in Portugal. At the end of the day, buying there involves the cost of travel, which is higher the more kilometers the buyer must travel. In the union there are those who believe that as this stock adjusts the shadow of the VAT to 21% will weigh more on sales. In your opinion we will begin to notice it in 2026.

The example of Portugal. Portugal has not only managed to stand out at the community level for your VAT reduction to bicycles, which went from 23 to 6% years ago. It also stands out for its producing muscle. It shows it clearly Eurostat. Its latest available data dates from 2023, but does not leave room for many doubts: of the 9.7 million bicycles manufactured in the European Union in 2023, Portugal contributed 1.8 million. In second place is Romania (1.5 million), followed by Italy (1.2) and Poland (800,000). Spain occupies seventh place.

In Spain the group has asked from the beginning the reduction of VAT on bicycles, a claim in which he is not alone. A recent report The Institute of Economics of Barcelona points out among its proposals to achieve more sustainable mobility, reducing VAT on the purchase, rental and repair of bicycles, as well as a 50% deduction for businessmen and professionals who integrate them. In April AMBE published a balance which shows that in 2024 the industry recorded a drop in turnover of 6.5%, which distances it from the data it reached in 2021.

Images | Martin Magnemyr (Unsplash), Eurostat and AMBE

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