Can private health insurance be deducted on your tax return?

Having medical insurance provides peace of mind and gives you access to healthcare services without long waiting times; but it can also come with tax benefits. Not all taxpayers can deduct private health insurance expenses on their tax returns, but it is possible in some cases. 

Who can avail of these tax benefits?

Below, we’ll look at the FAQs about health insurance and tax returns if you’re self-employed, a company, or an employee:

• Medical insurance taken out by the self-employed.

A self-employed person who files their economic activities through direct tax assessment in their personal income tax returns can deduct health insurance costs for themselves, their spouse, and children under 25 who live with them, provided they do not exceed €500 per person/year, or €1,500 if one of them has a disability.  

• Health insurance taken out by companies or self-employed workers for their employees.

Companies and self-employed individuals alike who take out health insurance for their employees and their families as part of a benefit in kind can deduct this cost, either from their Corporate Income Tax or from Income Tax, as appropriate, provided they comply with the justification and accounting requirements set out in the regulations.

• Employees with health insurance taken out by their company or employer

From the worker’s perspective, the health insurance taken out by their company or employer to insure them, their spouse, and their children is not considered income in kind for personal income tax purposes, provided this cost does not exceed €500 per insured person, or €1,500 in the case of a disabled person. 
 

Can individuals deduct their health insurance expenses from their personal income tax return?

Unlike cases in which insurance is taken out for an employee by their company or employer, or by a self-employed person, which are subject to the tax treatment indicated above, if health insurance is taken out privately, it cannot be deducted from personal income tax returns. 

In any case, each situation should be looked at on a case-by-case basis, as regulations may vary depending on the Autonomous Community the individual resides in.
 

What other insurance policies can impact personal income tax?

Some insurance policies other than health insurance can also impact personal income tax returns. For example:

• Home insurance, in the case of rentals, taken out by the property owner. 
• Worker liability or occupational accident insurance,, if paid by the company. 

In any case, we recommend keeping all documentation and speaking to a tax advisor about each specific situation.  

This content is for informational purposes only and does not constitute tax advice.