Which insurances entitle natural persons to tax advantages?

Filing an annual tax return is considered an annoying chore primarily linked to loss of funds. Paying the owed tax, naturally, is not a happy process for anyone, but due to its mandatory nature, it needs be done annually before the end of April.

Those working solely under a labor contract traditionally feel relief that they are exempt from these irritating procedures, because they are not obliged to file an annual tax return. But is everyone aware that the tax return can bring not only expenses, but also benefits?

Tax benefits for personal contributions to “life” insurance

If you have concluded a “life” risk insurance or one of a savings or investment nature, you can benefit from the following tax advantage: Payments toward the “life” insurance are deducted from the annual tax return, the advantage being limited to 10% of the amount of the taxation base.

Tax advantages for personal contributions to a Voluntary pension fund

Saving extra for retirement? You can benefit from a tax advantage, regardless of the Voluntary pension fund (VPF) you use for insurance. Similarly to “life” insurance, you have an option to reduce your annual taxation base (that is, our income, less social security contributions, before they are taxed with a 10% tax on income) by the amount of your personal contributions to VPF for the current year. Here, once again, the maximum amount of the advantage is 10%.

It is important to note that these advantages DO NOT apply for contributions to a Universal or Professional pension fund, but only to personal contributions to a Voluntary pension fund.

Supplementary health insurance

In the event that not the employer, but you are paying your contributions to your supplementary health insurance or you have decided to conclude one for yourself and your family, you can also get 10% back of the amount of personal contributions made throughout the year by filing a statement under art. 50 of the Income Taxes on Natural Persons Act.

What we should know:

  • Contributions must be personal, and not at the employer's expense;
  • To achieve a maximum tax effect with a savings “life” insurance, it is a good idea to conclude insurance for a period of 15 years or more;
  • If you need to withdraw a part of the amount accrued in the Voluntary pension fund, try to withdraw the accrued income, without the principal, because it is exempt from taxes;
  • If you transfer your contributions through an employer (but they are at your expense and the employer is not benefiting from a tax advantage), you will obtain your tax effect monthly and you do not need to file the return at the end of the year;
  • To file your return online, you need to have a Personal Identification Code (PIC), which can be obtained free of charge from an NRA office, or have an electronic signature.

If you still do not have a “life” insurance or additional health insurance, or you wish to save voluntarily for retirement, contact us for more information. We will be happy to prepare a personal offer according to your needs.



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