Change of Personal Allowances
The House of Representatives of the Republic decided to increase the annual limit of personal allowances from 1/6 to 1/5 of the taxable income (tax deductions). This decision was published in the Official Gazette on 19 December 2019.
The above benefit is a compensatory measure for the introduction of the contributions to the National Health System contributions.
THE PERSONAL ALLOWANCES PROVISION
Physical persons were allowed to deduct personal allowances for tax purposes up to the 1/6 of the taxable income, subject to conditions. Personal allowances included Social Insurance Contributions, Life Insurance Premiums, Contributions in Approved Provident Funds, Pension funds and Medical funds.
The annual limit of 1/6 is now increased to 1/5, including among the above-mentioned contributions, the contributions to the General Healthcare System.
Although the amending provision in the Official Gazette does not define the fiscal year as from which the new limit is effective, we understand that it is applicable from tax year 2019 onwards.
Associate – Tax Department
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companies are conducting business, each of which is a separate legal entity.