PERSONAL TAX – Allowable deductions for life and private medical insurance premiums, contributions to social insurance, pension and provident funds, and, contributions to GHS.

As per the Tax Department’s announcement on 07 January 2020, according to the amendment law N173(I)/2019 as approved by the Parliament and with effect from 19 December 2019, the combined Personal Tax allowable deductions limit for the above listed payments is increased to 1/5 of the net taxable income* of the individual.

Note that a tax deduction for these amounts is, in certain cases, subject to further conditions (for example life insurance premiums are subject to a maximum of 7% of the insured amount).

The above amendment applies from the tax year 2019.

 

*Net Taxable Income: is the Gross Income less any deductible expenses and/or exemptions, before the personal allowances

 

Example of Net Taxable Income calculation:

 

Gross Income

50,000

Exemptions

(8,550)

Deductible expenses

(500)

Net Taxable Income*

40,950

 

 

Personal Tax Allowance

(limited to 1/5 of Net Taxable Income)

8,190

 

For further information, please contact Constantinos Christofi