Deduction for Transportation Cost of Employees Rules

At the end of February, the Deduction for Transportation Cost of Employees Rules were published through LN67 of 2018. These rules shall apply with respect to transportation costs incurred for the transport of employees as from the year of assessment 2018. These rules shall remain in effect up to the year of assessment 2020.

An undertaking may claim a deduction against its income equivalent to 150% of the employee transportation costs incurred in the relative year. Employee transportation costs are defined by the Rules as “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 organised by the undertaking or any other entity.”

The deduction may only be claimed on the lower of:

1. €25,000 of the employee transportation costs incurred by the undertaking in the year preceding the year of assessment; or
2. €300 per employee whose transportation costs have been incurred by the undertaking in the year preceding the year of assessment.

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 Act. The deduction available under these rules may only be availed of if the undertaking:

1. maintains proper records of the employee transportation costs in respect of which the deduction is claimed;
2. claims the deduction in its income tax return relative to the basis year in which the employee transportation costs were incurred;
3. 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.

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