Deduct overseas health insurance from tax: How to maximise your savings
01.04.25
9
Minutes
Katrin Straub
Managing Director at nextsure
Can you deduct the cost of your overseas health insurance from your taxes? Many policyholders are unsure which rules apply and how they can get back up to 100 per cent of their contributions. This article explains the details and shows you how to do it.
The topic in brief and concise terms
Contributions to international health insurance may be tax-deductible as special expenses (private) or as income-related expenses/business expenses (professional).
Private overseas health insurance is subject to maximum amounts (€1,900 for employees and €2,800 for self-employed people), which are often already reached by basic health insurance.
Work-related overseas health insurance is generally fully tax-deductible, without being counted towards the maximum limits for deductible personal insurance expenses.
Basics: When is overseas health insurance tax-relevant?
Travel health insurance (AKV) provides you with medical cover when you travel. Contributions towards this may, in some circumstances, reduce your tax burden. Since 2010, the Citizens’ Relief Act has allowed the deduction of precautionary expenses. These also include health insurance contributions. Whether they are tax-deductible depends on the type of use: private or business. Different rules apply to private trips and business travel. Many taxpayers overlook this distinction and lose money as a result. Correctly declaring it in your tax return can increase your refund by dozens of euros. This section answers the first important questions. Find out more about what travel health insurance is.
Private overseas health insurance: understanding deductions as special expenses
Contributions for a privately used overseas health insurance policy are treated as special expenses. They are entered in the ‘Vorsorgeaufwand’ section. Statutorily insured persons use line 23, privately insured persons line 28. However, there are annual maximum amounts for pension expenses. For employees and pensioners, this is 1,900 euros. Self-employed persons can claim up to 2,800 euros. These maximum amounts are often already used up by contributions to basic health and care insurance. Additional tax relief through the AKV is then usually no longer possible. Nevertheless, it is always worth checking on a case-by-case basis. Correctly stating your health insurance in your tax return is crucial.
Work-related overseas health insurance: take full advantage of tax deductibility
The situation is different for business-related trips abroad. Here, you can often deduct the costs of overseas health insurance in full. Employees declare these as work-related expenses in Schedule N. Self-employed individuals record them as business expenses in Schedule S. The maximum amounts for special expenses do not apply here. The prerequisite is that you have borne the costs yourself. If your employer paid for the insurance, no deduction is possible. For mixed trips (partly private, partly business), you can claim the costs proportionately. A precise allocation of the travel days is necessary for this. Also bear in mind the general deductibility of insurance.
Requirements and limits of tax deductibility
For the tax office to recognise your international health insurance, certain conditions must be met. The insurance must cover private risks. The contributor and the policyholder must be the same person. Exceptions apply for contributions for children or spouses. Contributions for children can be deducted if there is an entitlement to child benefit (Annex Child, line 31). The contributions must have been paid in the same year in which they are deducted. The insurance company must be based in Germany or in the EU/EEA area. It is also important to consent to the electronic transmission of your insurance contributions to the tax office. Without this consent, a deduction is often not possible. Find out, where insurance policies are entered.
The following points are relevant for deductibility as special expenses:
The insurance covers benefits that correspond to the level of statutory health insurance (basic cover).
There is no connection with tax-free income, such as an employer subsidy for this very insurance.
The maximum amounts already mentioned of EUR 1,900 or EUR 2,800 (double for married couples) are not exceeded.
Premium refunds from the insurer reduce the deductible contributions.
These criteria determine tax savings of hundreds of euros.
Special case of long-term overseas health insurance: what applies for tax purposes?
For long-term overseas health insurance, the same tax rules generally apply. Here too, deductibility depends on whether it is for private or professional reasons. For private long-term stays, the contributions can be deducted as special expenses. The maximum amounts of EUR 1,900 or EUR 2,800 apply here again. If the long-term stay is work-related (e.g. secondment), the costs are fully deductible as employment expenses or business expenses. This can result in significant tax savings, especially for longer stays. Precise documentation of the professional reason is important for the tax office. Clarify whether your health insurance applies abroad.
Non-deductible travel insurance: A clear overview
Not every type of travel insurance is tax-deductible. Travel cancellation insurance typically does not count. You can usually not claim travel baggage insurance either. The tax office only recognises insurance policies that serve direct preventative healthcare. The distinction is important to avoid making incorrect statements on your tax return. Focus on the deductible overseas health insurance and, where applicable, travel accident insurance. A good overseas travel health insurance policy is worth its weight in gold. The costs of overseas health insurance are often lower than you might think.
To get the most out of your tax return, please note the following expert tips. Our expert tip: always check whether your total retirement provision expenses exceed the maximum limit of €1,900 (single people) or €3,800 (married couples). If this is not the case, you can deduct private overseas health insurance contributions up to this limit. Another tip: for work-related trips, you should always claim the full costs as employment expenses. This also applies if the trip only lasts a few days. Please keep all receipts and supporting documents carefully for at least four years. The tax office may request them for review. We will be happy to provide you with comprehensive advice. Find out more about our overseas health insurance policies.
Important aspects for your tax return are:
Correct allocation: private (special expenses) or work-related (employment expenses/operating expenses).
Entry in the correct schedules: Vorsorgeaufwand, N or S.
Observance of the maximum amounts for special expenses (€1,900/€2,800).
Proof of the business-related purpose for business trips.
Check whether the basic cover of the AKV corresponds to the German level.
Consideration of premium refunds.
These points help avoid mistakes and make the most of potential benefits.
Conclusion: using overseas health insurance for tax purposes – it often pays off
The question of whether you can deduct foreign health insurance from your tax bill cannot be answered with a simple yes or no. For policies taken out for work-related reasons, the deduction is usually possible in full. For private contracts, it depends on the pension expenses you have already paid and the applicable maximum amounts. A precise review of your individual situation is therefore essential. However, with the right knowledge, you can often save several tens to hundreds of euros a year. The effort of gathering the receipts and entering them correctly is worthwhile. Remember to review all deductible insurance policies.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific optimisation suggestions.
More useful links
Wikipedia offers a comprehensive overview of overseas health insurance.
The Federal Ministry of Health provides information on health insurance abroad.
The Federal Ministry of Finance provides the payroll tax manual, which contains relevant information on tax aspects.
FAQ
How does the Citizens' Relief Act affect deductibility?
The 2010 Citizen Relief Act stipulates that contributions to basic health and long-term care insurance are taken into account more favourably for tax purposes. Overseas health insurance policies may fall under other precautionary expenses, provided that maximum limits are not exceeded.
Can I also deduct contributions for my children?
Yes, if you receive child benefit or the child tax allowance for your child, you can enter its contributions to international health insurance in the Anlage Kind (line 31).
What happens if my employer pays for the overseas health insurance?
If your employer covers the costs, you can no longer claim them in your tax return, as you did not incur any expenses yourself.
Is there a difference between a short trip and a long-term stay?
For tax purposes, the same principles apply to long-term overseas health insurance: what matters is whether the reason is private or professional and compliance with the maximum amounts for private use.
Does my travel health insurance have to provide certain benefits?
For full tax deductibility as basic cover (if the maximum amounts are not fully utilised), the cover should correspond to the level of German statutory health insurance (the so-called social welfare-equivalent level of benefits).
Which supporting documents does the tax office require?
You need proof of your insurance contributions. If the trip is for business reasons, you also need evidence of the business purpose of the trip. The data is often transmitted electronically if you have consented.
