deductible

How does deductible health insurance work?

Hiring health insurance not only brings the obvious benefits of health protection against any unforeseen event but also provides tax benefits. Here we tell you all the necessary information to be able to deduct medical insurance, for example, in your income statement.

Can I deduct health insurance?

In the first place, it should be noted that not everyone can qualify for insurance, but it must have a series of characteristics. An individual cannot benefit from these tax benefits, since they are considered a voluntary supplement to the coverage offered by the National Health System. On the other hand, the self-employed can opt for these deductions as well as companies that provide their employees with medical insurance.

This tax benefit is suitable, both in the case of the self-employed and those who work for others and have medical insurance provided by the employer.

Concerning this, the Ministry of Finance makes a big difference between the self-employed and employees, since their circumstances are different.

Tax benefits for the self-employed by deducting health insurance

Spanish regulations provide that health insurance is a deductible expense in the personal income tax return, therefore, those who are self-employed and have a health policy may avail themselves of large tax deductions. In this sense, these people can benefit from the personal income tax return in two possible ways:

  • In one payment.
  • An installment payment, through model 130.

On the other hand, if you want to obtain this tax benefit, it must be included in the direct estimation regime.

Regarding the way to make the declaration, if the insurance appears as “income from economic activities in objective estimation”, the deduction is made automatically. On the other hand, if it appears “in the direct estimate” you will have to complete box 200, “insurance premium”.

In addition, one of the great advantages of this tax deduction is that both the spouse and children under 25 years of age can deduct up to 100% of the medical policy. They must reside in the family home, with a maximum exemption of 500 euros for each member of the family environment.

Employee Benefits

If an employee receives medical insurance as part of his salary, it is not considered work income, so he is exempt from declaring it, assuming a great saving. In this sense, group insurance represents an important tax benefit for companies. They allow them to deduct all the money that their workers allocate to insurance. This is because it is taxed by the Corporation Tax.

However, in any case, we must take into account the fiscal regulation of each autonomous community, as well as the relief of medical insurance. If you have any questions or queries, it is appropriate to go to a manager, or to the Tax Agency itself, to help us do it correctly.

Insurance that can be deducted on income

Tax benefits not only refer to health insurance deduction  but there is also another series of insurance that can provide you with very attractive deductions in the Personal Tax.

How are the insurances of:

  • Home: in this case, you can benefit from these deductions if the policy is linked autonomous, if it is rented, or, as in the case of health insurance, if it is autonomous.
  • Car: if the product is linked to the professional activity carried out, see a taxi driver, a chauffeur, or a delivery man, and also if he is self-employed.
  • Life: like the rest of the insurance mentioned, the self-employed benefit from these tax advantages and, in addition, if this policy is related to a savings plan or a mortgage.

In short, deducting an insurance policy is a very attractive option for anyone. But as we have explained, it is necessary to meet a series of requirements for this relief to be effective. Therefore, it is important to know the tax regulations of each autonomous community to know how to do it most appropriately and beneficially. Unitech has all the information, given more than 50 years of experience protecting the interests of health professionals in Spain.