Here is our latest news from Fairfax Yeaman Cyprus
Here is our latest news from Fairfax Yeaman Cyprus
Social Insurance maximum insurable income increase, National Health Insurance System Contributions and change of Income Tax Legislation concerning the tax allowances.
Fairfax wishes to inform all employers that in 2020 an increase in Maximum Insurable Income in relation to Social Insurance Fund (SIF) contributions will come into effect, the National Health Insurance System (NHIS) will enter the second phase of full implementation with the increase in contribution rates and an amendment in tax legislation has come into force from 19/12/2019 concerning the allowances for income tax purposes.
SIF Insurable Income increase
According to the provisions of the Social Insurance Law of 2010 the rate of social insurance contribution is applied to a maximum level of earnings. The maximum level of earnings up to 2019 was €54,648, while from 2020 the maximum level of insurable income will be increased to €54,864 per annum.
There will be no further change at the contribution rates currently in effect.
NHIS Full implementation
According to National Health Insurance System Law of 2010 (as amended in 2017), employer and employee contributions for the implementation of the system that commenced in 2019 will come in full completion in 2020 entering the second phase.
Specifically, as of 01/03/2020, employers will contribute 2.90% on the employee’s earnings, and the employees will contribute 2.65% increased from 1.85% and 1.70% retrospectively that is currently in effect and will continue to be until the end of February 2020. The employer is responsible for paying both their own and their employees’ contributions through Social Insurance or Income Tax Office Services, depending on the nature of income, by means of deductions from their salary
It should be noted that NHIS contributions are paid on all employee earnings (as earnings are defined in the Social Insurance Law) up to €180,000. There is no indication at the moment that the maximum income for NHIS purposes will be increased.
Tax Allowances
Income Tax Department has revised article 14 of the Income Tax Law 118(I)2002 introducing a new tax relief rate for allowances including life insurance, medical, pension, provident fund and social insurance contributions. As of 19/12/2019 the tax relief benefit for the tax payers was increased from 1/6 to 1/5.
Due to the late publication of the relevant article amendment, the Income Tax Department is expected to proceed with a number of tax refunds to the tax payers that are affected once the submission of the personal income tax return for Tax Year 2019 is completed.
How can we help?
Fairfax and its dedicated personnel are at your service to assist you in adjusting to the new changes introduced by the authorities.
For more information call +35725558025 or email accounts@fairfaxyeaman.com
