Malawi | Is Medical Insurance liable to Fringe Benefit Tax?

Malawi | Is Medical Insurance liable to Fringe Benefit Tax?

Malawian legislation states that Medical care is not liable for Fringe Benefit Tax (FBT).
  1. Fringe Benefit Tax (FBT) is tax paid on the taxable values of fringe benefits being provided by an employer to an employee.
  2. The rate for FBT is 30% and all employers except the government are liable to FBT.
  3. With regard to the employer-employee relationship, fringe benefit means any asset, service or other benefits in kind, provided by or on behalf of an employer to an employee, if such provision includes an element of personal benefit to the employee.
    - For example, the taxable value for property owned by the employer is 50 % or 10 % of the employee’s salary where unfurnished housing accommodation is provided or 12 % of the salary where furnished housing accommodation is provided.
  4. To register, an employer fills out Form FBT 1 and gets Form FBT 2 for remittance.
  5. Any employer who gives fringe benefits to employees should register for FBT 14 days after starting to give fringe benefits to employees.
  6. However, an education loan or an emergency advance obtained to cover medical or funeral expenses does not constitute a personal loan and therefore not liable to FBT.
  7. FBT is paid quarterly and is due within 14 days from the end of each quarter.
  8. FBT should be remitted to any MRA Domestic Taxes Office nearer to the taxpayer.
  9. Any employer who fails to register or delays or fails to pay FBT shall, in addition to the amount due, be liable to a penalty of 20% of the tax due.

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