L.N 67 of 2018 – Deduction for Transportation Cost of Employees Rules, 2018

The Deduction for Transportation Costs of Employees Rules, 2018 (hereinafter referred to as ‘Rules’) are published under the Income Tax Act (Chapter 123 of the Laws of Malta) and shall start applying in respect of 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.


It is important to note that not all transportation costs shall qualify under the Rules. In fact, it is those 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 8 persons, whether organized by the same undertaking or any other entity which are defined as ‘employee transportation costs’ under these Rules.

On the other hand, an undertaking is defined as a person carrying on a trade, business, profession or vocation as referred to in Article 4(1)(a) of the Income Tax Act.


An undertaking may claim a deduction against its income equivalent to 150% of the employee transportation costs incurred in the relative year.

The said deduction may be claimed in the year of assessment on the lower of the following:

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

Should a deduction be claimed with respect to these employee transportation costs, then further deductions on the same costs cannot be claimed.

Conditions for the deduction to apply

In order to benefit from these deductions, the following conditions need to be satisfied:

  1. 1.The undertaking benefitting from these Rules maintains proper records of the employee transportation costs in respect of which the deduction is claimed;
  2. 2.The undertaking claims the deduction in its income tax return relative to the basis year in which the employee transportation costs were incurred;
  3. 3.The undertaking submits with its income tax return a declaration by a Certified Public Accountant (CPA) confirming that the undertaking has correctly computed the said costs, in such a manner as the Commissioner for Revenue may require.