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In Eswatini, the tax treatment of travel allowances and company cars depends on whether an employee receives a vehicle allowance or a company vehicle, and whether the vehicle is available for private use.
Fixed car allowance with private use: Where a fixed car allowance is provided, and the vehicle is available for private use by the employee or their family or household, the full allowance is included in taxable income.
Fixed car allowance for business travel: Where an employee receives an allowance to purchase and maintain a personal vehicle required for business travel, the taxable amount is calculated as follows:
A = B − (C × D ÷ E)
Where:
Where accurate records are not maintained, the following deemed costs apply:
Where an employer provides a vehicle for an employee’s private use, the taxable benefit is calculated as follows:
Taxable benefit = 20% × [(A × B ÷ C) − D]
Where:
Where an employee receives more than one company car, the taxable benefit must be calculated separately for each vehicle.
Employers should correctly classify vehicle allowances and benefits, apply the relevant tax formulas, and retain supporting records for mileage, vehicle costs, private-use availability and employee contributions.
If this article raised questions or highlighted areas you’d like to understand better, let’s talk.Our team can walk through the details, implications, and practical considerations for your business.
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