Benefits in Kind

08 January, 2020

According to the Article 5 of the Income Tax Law, as from 1st January 2019 the benefits provided to an employee from holding an office or employment are subject to tax. These include benefits provided to a member of his family either in cash or otherwise.

Benefit in Kind (“BIK”) is considered to be the benefit that is, or is deemed to be, granted in connection with any employment or the holding of an office.

Categories of BIKs

  • Benefits in kind in relation to cars
  • Accommodation and use of assets
  • Other benefits in kind

Exemptions as a general principle apply to the extent where the payment or reimbursement to the employee or officer is made against actual costs incurred supported by receipts.

Other more specific exemptions include:

  • Computer equipment
  • Telephone services
  • Childcare facilities
  • Goods consumed in the workspace
  • Newspapers
  • Awards for long-term service
  • Christmas parties and events
  • Subscriptions to professional bodies
  • Training courses/scholarships
  • Uniforms and specialised attire
  • Relocation expenses

The value of the benefits in kind is taxed the same way as the gross earnings, through the submission of TD7. Employers are required to declare the benefits in kind provided by them or by their connected companies.

For any questions or clarifications on benefit in kind tax and rules please contact our team of tax advisors.

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