Tax Deductions for Transportation Costs for Employees Rules 2018

28 March 2018

Legal Notice 67 of 2018 was recently introduced and now provides an inflated deduction for employers who provide transport cost to their employees.

In a nutshell, the conditions for the Legal Notice are as follows:

  1. “Employee transportation costs" mean costs incurred by an undertaking for transportation of employees to and from the place  of  work  using  means  of  transport  capable  of  carrying more  than  eight  (8)  persons,  whether organized  by  the undertaking or any other entity;
  2. Cost capped at the lower of €25, 000 annual deduction and €300 per employee annually;
  3. These  rules  shall  remain  in  effect  up  to  the  year  of assessment 2020;
  4. Deduction is equivalent to cost plus a further 50%;
  5. The employee transportation costs in respect of which a deduction is claimed under these rules may not benefit from any other deduction provided under the Income Tax Act.

 

The deduction available under these rules may only be availed of if the undertaking benefiting thereunder:

  • Maintains  proper  records  of  the  employee transportation  costs  in  respect  of  which  the  deduction  is claimed;
  • Claims the deduction in its income tax return relative to the basis year in which the employee transportation costs incurred;
  • Submits with its income tax return a declaration by a  Certified  Public  Accountant  confirming  that  the undertaking has correctly computed the said costs, in such manner as the Commissioner may require.

 

For further information regarding this recent development and how it might affect your business please contact our Tax Partner Josef Mercieca.