Tax Treatment of Medical Scheme Contributions

12/06/2024

Through a circular issued on 30 May 2024, the Cyprus Tax Department announced amendments in the tax allowable thresholds for contributions to medical schemes. It relates to contributions by individuals for their own coverage, as well as to those by employers for their employees’ coverage.  

The tax allowance is granted for contributions to medical schemes offered by insurance companies supervised by the Superintendent of Insurance or by organised employer or industry funds with a separate legal personality. The allowance is granted as follows:

Until the tax year 2023

• Tax allowance for the employer for annual contributions to such schemes up to 1% of the emoluments of employees covered by such schemes.
• Tax allowance for the employed/self employed/income earner for annual contributions to such schemes up to 1.5% of the taxable income of these persons.

For the tax year 2024 and onwards

• Tax allowance for the employer for annual contributions to such schemes.
• Tax allowance for the employed/self employed/income earner for annual contributions to such schemes up to 2% of the taxable income of these persons.