Can I Claim Company Car Fringe Benefits as a Business Expense in Malta?
Partially. A company car given to an employee is a taxable fringe benefit valued by a formula, so flag every company car for a benefit calculation.
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What Malta Tax and Customs Administration (MTCA) says
Company cars are taxable fringe benefits under S.L. 123.55. The annual benefit is the vehicle use value plus the maintenance value plus the fuel value, multiplied by a private-use percentage. Vehicle use is 17% of the car value for cars up to 6 years old or 10% for older cars. Maintenance and fuel are 3% each for a car value up to €28,000 or 5% above. The private-use percentage scales from 30% for values up to €16,310 to 60% above €46,600. Point-to-point commercial vehicles up to €16,310 can qualify for 0% with Commissioner approval.
When you can claim
- The car's business cost, subject to the wholly and exclusively test
- The benefit calculated under S.L. 123.55
- Commercial point-to-point vehicles, with approval
- Documented business use
When you cannot claim
- An untaxed private benefit
- Costs with no calculation of the benefit
- Private fuel paid by the company without treating it as a benefit
- Vehicles with no record of who uses them
Good to know
Pro tip: Ask the practitioner to run the benefit formula before the car is ordered, so the tax cost is known.
Important: Flag every company car for a benefit calculation, because the private-use percentage rises with the value of the car.
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