How does mileage allowance work in Cyprus?
- Cash allowances paid to employees or officers in respect of the use of their own cars, for business duties
- A company car is made available to employees for private use
What is not included in the Cyprus mileage allowance?
What are the mileage allowance rates in Cyprus in 2024?
- The payment rate for each kilometre does not exceed government guidelines (any excess amount will be considered taxable income)
- The reimbursable travel is to be recorded in a logbook which is readily available for verification by the Tax Department
- Payments cover only the business element (i.e. no personal trips)
- The logbook is kept by the employer for at least six years
Multiple car cash allowances
- One employee has two, separate allowances each month:
- Allowance 1: €3,000 from Employer A
- Allowance 2: €2,000 from Employer B
- Applying the deduction:
- The employee can choose to apply the 50% deduction or the €1,500 maximum to only one of these allowances
- If applied to Allowance 1 (€3,000), the fringe benefit would be €1,500 (€3,000 - €1,500)
- If applied to Allowance 2 (€2,000), the fringe benefit would be €500 (€2,000 - €1,500)
- Informing employers:
- If starting with Employer B, the employee must inform Employer B about the car cash allowance from Employer A. This ensures that both employers understand the single deduction limit and apply it correctly.
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