AMENDMENTS TO THE FRINGE BENEFIT RULES 2017

In August 2017 a legal notice L.N. 205 of 2017 was issued which amended the Fringe Benefits Rules.

• A new rule 3A has been added, and provides that fringe benefits are deemed to arise in the country where the services in terms of the relative contract of employment or office are wholly or principally performed.
• In the case of a benefit arising by reason of directorship, such benefits are deemed to arise where the company is managed and controlled.
• Vans have now been excluded from being treated as fringe benefit, so the private use of a van has no value.
• The use of a private vehicle used wholly or mainly from point to point, by an employee in performance of his duties with a value of €16,310 or less is no longer considered as fringe benefit.
• The value of fringe benefit in the event of immovable property granted to an employee shall no longer be increased by five times the annual ground rent payable.
• The annual value of an immovable property  provided by title of emphyteusis,  granted by an employer to an employee, this shall be treated as follows:

1. The highest of 5% of the market value.
2. The total of 5% of the market value, and amount equivalent to the relative ground rent.

• The benchmark interest on loans granted to employees has been reduced to 6.5%.
• Loans provided to an employee, who holds more than 25% shareholding  in the same company, is no longer deemed fringe benefit.
• The acquisition of a motor vehicle for no consideration, the beneficiary had before the transfer made use of the same motor vehicle, shall be reduced by the total value of fringe benefit that was calculated during the time the employee made use of the vehicle,provided that the value so reduced shall be not less than zero.
• When the transfer consists of in-house property, or provision of an in-house service, the first €700.during the calendar year are exempt.
• The value of a fringe benefit under the share option scheme, is now taxed at a flat rate of 15%.
• Fringe benefits which are exempt are listed below:

1. Relocation costs and costs of journeys between work shifts.
2. Cost of providing medical examinations, medical care, medicine and treatment, individual or group counselling for safe work practices.
3. The use of a mobile phone or facsimile machine.
4. Reimbursements of traveling between Malta & Gozo, by air and sea.