Tax deduction for transportation costs

By means of LN 67 of 2018, the Government of Malta has issued new rules which provide for a tax deduction to undertakings carrying out a trade or business that incur costs for the transportation of employees to and from the place of work.  The tax deduction is equivalent to 150% of the transportation costs […]

Written By ACT Team

On March 1, 2018
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By means of LN 67 of 2018, the Government of Malta has issued new rules which provide for a tax deduction to undertakings carrying out a trade or business that incur costs for the transportation of employees to and from the place of work.  The tax deduction is equivalent to 150% of the transportation costs incurred during the year.

The deduction is capped at Eur25,000 p.a. or Eur300 per employee, for whose transportation costs would have been incurred by the undertaking during the year, whichever is the lower. No other tax deduction will be possible if the undertaking has benefitted from this deduction in terms of these new rules.

To benefit from this deduction, the undertaking must:

  1. maintain proper records of all transportation costs incurred;
  2. claim such a deduction in its income tax return in the year in which the transportation costs were incurred;
  3. submit, together with its income tax return, a declaration signed by a Certified Public Accountant confirming that it has correctly computed the said costs. 

These rules shall be applicable as from year of assessment 2018 and will remain in effect up to year of assessment 2020.

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected].