Income Tax Deductions

Find out which expenses can be reclaimed...

The following is deducted from gross income before tax is calculated:

  • A 10 percent deduction in lieu of expenses related to employment (minimum deduction €426, maximum €12,170 per individual for 2015 income) 
  • Certain social security contributions
  • Interest on certain loans used to buy into a business
  • Pension contributions up to €24,714 in 2016
  • Luncheon vouchers and holiday vouchers – up to fairly low limits
  • The income from profit-sharing schemes is generally exempt from income tax (but not from social contributions)

The following is deducted from net income before tax is calculated:

Allowance for over 65s and the disabled

If you are over the age of 65, hold an invalidity card or receive a military pension, for 2015 income you are entitled to a tax-free allowance of: 

  • €2,347 where your total household income is up to €14,730
  • €1,174 where your income is between €14,730 and €23,730
  • Double the relevant allowance value where you are part of a married or PACS couple and you both fulfil the conditions for eligibility 

Tax rebates

If the tax due is less than Є1,553 for a single person, or €2,560 for a couple (for 2015 income), you will receive a credit from the tax office, known as the Décote

The amount to be credited is the difference between the Є1,553/€2,560 threshold and three-quarters of the gross tax liability. If your eventual liability, after calculating the Décote, is less than €61, the tax will not be collected – this is called the Franchise.


Tax credits

Various tax credits are available. They are not deductible against the gross or net income, but deductible against the actual tax.

Certain tax credits are given on a cumulative basis. The maximum credit that can be received from 2015 (that is, tax payable in 2016) is €10,000 of the global net taxable income of the household (before the scale rates are applied).

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice. 

Blevins Franks Tax Limited Leading international tax and wealth management advisers to UK nationals living in Europe. Email