Tax deductions for medical insurance

The Cyprus Tax Department, via Circular, has recently clarified the tax treatment of premiums paid on medical insurance schemes by individuals as well as by employers on behalf of their staff.

The tax deductions on approved by the Commissioner of Taxation medical insurance schemes are given as follows:

Up to the tax year 2023:

• Employers: Tax deduction from the taxable income of the employer for the annual contributions made to the medical scheme, up to 1% of the remuneration of the employees who are members in the medical scheme.
• Individuals: Tax deduction from the taxable income of the individual (employee or self-employed) for the annual contributions made to the medical scheme, restricted to 1.5% of the gross income of the individual.

From the tax year 2024 onwards:

• Employers: Tax deduction from the taxable income of the employer for the annual contributions made to the medical scheme (no restriction).
• Individuals: Tax deduction from the taxable income of the individual (employee or self-employed) for the annual contributions made to the medical scheme, restricted to 2% of the gross income of the individual.

PGE&Co remains at your disposal for any clarifications and for further assistance that might be needed on this or on any other matter.