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Foreign medical insurance payments are tax deductible

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Public medical insurance payments are tax-deductible in the country of residence of the taxpayer, even when the beneficiary is a different country


In an EU Court judgement dated 23-04-2009 (Uwe Rüffler case, C-544/07), the Court ruled that the medical insurance payments that a resident in Poland paid in Germany are tax-deductible on income tax returns submitted in Poland. This judgement is relevant, as there are still states in the EU which set limits to the deductibility of this expenditure and only accept such expense when it takes place within their own borders. Fortunately, Spain does not have this problem and Spanish authorities now accept these expenses with no limits whatsoever. Therefore, expatriates moving to Spain but who continue to pay social security in their country of origin (pension insurance or medical insurance) can deduct this expense on their Spanish income tax return with no limits on the amount.

However, the deductibility of this expense is associated with the fact that it is an expense paid to a public body, not a private body. For instance, in the case of a German resident in Spain making payments to private medical insurance in their country (as legal regulations in Germany allow payments outside the public medical system in some cases), the expenses are not tax-deductible in Spain.

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