Filenews 6 June 2024 - by Eleftheria Paizanou
The tax deductions granted to taxpayers for the premiums they pay for health care plans are differentiated.
The changes will apply to income returns for employees and employers for the 2024 tax year. Specifically:
– A deduction from the employer's taxable income will be granted for the annual ordinary contributions paid to such a scheme. It is worth noting that until today the discount received by employers was up to 1% of the salaries of employees who are members of the scheme.
– With the second change, a deduction from the taxable income of the individual (employee, self-employed, income earner) will be provided for the annual usual contributions paid to such a scheme, with a limitation of up to 2% of the individual's income. Under the existing legal framework applicable until tax year 2023, the deduction was 1.5% of the individual's income.
The Department of Taxation, in its circular regarding the tax treatment of such health plans, emphasizes that the provision of a discount for both the employer and the individuals concerns the total contributions paid to all the plans in which these persons participate.
In addition, it is clarified that the discount will concern contributions to cover health care and dependent persons, i.e. spouse and dependent children included in the scheme. The discount will be granted after the expense has been incurred by the employer or the individual and provided that the appropriate presumptions of payment of premiums are kept, the amount of which should be equal to or higher than the discount claimed. It is also clarified that contributions to the GHS are provided as a separate deduction and do not affect the amount of the tax deduction for contributions paid to other health plans.
If the employer and the employee contribute 50% each to cover the health premium, then each one can claim the discounts. If the employer contributes more than 50% of the premium to the employee's health plan, then he receives a discount on the amount he pays.
