TAX ON FRINGE BENEFITS

As announced by the Minister of Finance in the Budget Speech for the financial year 2001, income tax on fringe benefits will henceforth be fully enforced. New rules will be introduced to ensure the straightforward calculation and collection of the tax, and draft guidelines have been drawn up for this purpose. A more detailed version of these guidelines is expected to be available in January 2001. This will be mailed by the Inland Revenue Department to all employers.

The guidelines will be supported by legislative measures, which are planned to be put in place during 2001 and to be applicable to all fringe benefits derived as from 1st January 2001 (Year of Assessment 2002)

Fringe benefit tax will be accounted for through the FSS system and the tax withheld will be remitted to the Inland Revenue with the monthly FS5 document. As employers will need time to adjust and implement the necessary changes to their payroll systems the remittance of tax on fringe benefits under the new system will become operative with the FS5 for the month of April 2001 that will be due for delivery to the Inland Revenue in May 2001. However the FS5 for April will have to account also for the tax on fringe benefits accruing during the months of January, February and March 2001.