As per the Tax Department's announcement on 07 January 2020, according to the amendment law N173(I)/2019 as approved by the Parliament and with effect from 19 December 2019, the combined Personal Tax allowable deductions limit for the above listed payments is increased to 1/5 of the net taxable income* of the individual.

Note that a tax deduction for these amounts is, in certain cases, subject to further conditions (for example life insurance premiums are subject to a maximum of 7% of the insured amount).

The above amendment applies from the tax year 2019.

*Net Taxable Income: is the Gross Income less any deductible expenses and/or exemptions, before the personal allowances

Example of Net Taxable Income calculation:

Gross Income

50,000

Exemptions

(8,550)

Deductible expenses

(500)

Net Taxable Income*

40,950

Personal Tax Allowance

(limited to 1/5 of Net Taxable Income)

8,190

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.