Deduct foreign health insurance from taxes: How to maximise your savings
1 Apr 2025
10
Minutes
Katrin Straub
CEO at nextsure
Can you deduct the costs of your international health insurance from your taxes? Many insured individuals are unsure about the applicable rules and how they can get up to 100 percent of their contributions back. This article explains the details and shows you how it works.
The topic in brief and concise terms
Contributions to foreign health insurance can be tax-deductible as special expenses (private) or business expenses (professional).
There are maximum amounts for private foreign health insurance (€1,900 for employees, €2,800 for self-employed persons), which are often already covered by basic health insurance.
Occupational expatriate health insurances are generally fully deductible without being counted towards the maximum limits for precautionary expenses.
Basics: When is foreign health insurance relevant for tax purposes?
The international health insurance (AKV) provides medical coverage while traveling. In some cases, contributions can reduce your tax burden. The Citizens' Relief Act has enabled the deduction of maintenance expenses since 2010, which includes contributions to health insurance. The deductibility depends on the type of use: private or professional. Different rules apply to private travel compared to business trips. Many taxpayers overlook this distinction and lose money. Correctly reporting in your tax return can increase your refund by dozens of euros. This section clarifies the first important questions. Learn more about what an international health insurance is.
Private foreign health insurance: Understand deduction as special expenses
Contributions for a privately used foreign health insurance are considered special expenses. They are entered in the pension expenses form. Statutory insured individuals use line 23, privately insured individuals use line 28. However, there are annual maximum amounts for pension expenses. For employees and retirees, this is 1,900 euros. Self-employed individuals can claim up to 2,800 euros. These maximum amounts are often already exhausted by the contributions to the basic health and nursing care insurance. An additional tax relief through the foreign health insurance is then usually no longer possible. Nonetheless, checking in individual cases is always worthwhile. Correctly stating your health insurance in the tax return is crucial.
Professional Foreign Health Insurance: Take Advantage of Full Tax Deduction
It is different for business-related trips abroad. Here, you can often fully deduct the costs for the travel health insurance. Employees list these as advertising expenses in Schedule N. Self-employed individuals record them as operating expenses in Schedule S. The maximum amounts for special expenses do not matter here. The condition is that you have paid the costs yourself. If your employer has paid for the insurance, no deduction is possible. For mixed trips (partly private, partly business), you can claim the costs proportionately. A precise breakdown of the travel days is necessary for this. Also, consider the general deductibility of insurance.
Requirements and limits of tax deductibility
In order for the tax office to recognise your international health insurance, certain conditions must be met. The insurance must cover private risks. The payer and the insured must be the same person. Exceptions apply to contributions for children or spouses. Contributions for children can be deducted if there is an entitlement to child benefit (Annex Kind, 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 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, deduction is often not possible. Find out where insurance policies are recorded.
The following points are relevant for tax deductibility as special expenses:
The insurance covers benefits that correspond to the level of statutory health insurance (basic coverage).
There is no connection to tax-free income, such as an employer's allowance for precisely this insurance.
The already mentioned maximum amounts of 1,900 euros or 2,800 euros (double for married couples) are not exceeded.
Refunds of contributions by the insurer reduce the deductible contributions.
These criteria determine tax savings of hundreds of euros.
Special case of long-term international health insurance: What are the tax implications?
For long-term international health insurance, the same tax rules generally apply. The deductibility also depends on whether the purpose is private or professional. For private long-term stays, the contributions can be deducted as special expenses. Here, the maximum amounts of 1,900 or 2,800 euros apply again. If the long-term stay is job-related (e.g., assignment), the costs are fully deductible as business expenses or operational costs. Significant tax savings can occur, especially during longer stays. Precise documentation of the professional purpose is important for the tax office. Check whether your health insurance is valid abroad.
Non-deductible travel insurance: A clear overview
Not every travel-related insurance is tax-deductible. Travel cancellation insurance typically does not fall into this category. You usually can't claim travel luggage insurance either. The tax office only recognises insurances that serve direct health care purposes. The distinction is important to avoid making incorrect entries in your tax return. Focus on the deductible foreign health and, if applicable, travel accident insurance. A good international travel health insurance is worth its weight in gold. The cost of foreign health insurance is often lower than expected.
Expert tips for maximum tax savings
To get the most out of your tax return, consider the following expert advice. Our experts' tip: Always check whether your total pension provisions exceed the maximum limit of 1,900 euros (singles) or 3,800 euros (married couples). If this is not the case, you can deduct private foreign health insurance contributions up to this limit. Another tip: For business-related travel, you should always claim the full costs as business expenses. This applies even if the trip only lasts a few days. Keep all receipts and documentation carefully for at least four years. The tax office may request these for review. We are happy to provide you with comprehensive advice. Learn more about our foreign health insurance policies.
Important aspects for the tax return are:
Correct classification: private (special expenses) or business (advertising/business expenses).
Entry in the correct forms: pension expenses, N or S.
Consideration of the maximum limits for special expenses (1,900/2,800 euros).
Proof of business purpose for business trips.
Check if the basic cover of the AKV meets the German standard.
Consideration of contribution refunds.
These points help to avoid errors and exploit potential.
Conclusion: Make use of international health insurance for tax purposes – it often pays off
More useful links
Wikipedia provides a comprehensive overview of international health insurance.
The Federal Ministry of Health provides information on health insurance abroad.
The Federal Ministry of Finance offers the Income Tax Manual, which contains relevant information on tax aspects.
FAQ
How does the Citizen Relief Act affect tax deductibility?
The Citizens' Relief Act of 2010 stipulates that contributions to basic health and nursing care insurance are given better tax consideration. Foreign health insurance can fall under other precautionary expenses, provided that maximum limits are not exceeded.
Can I also claim expenses for my children?
Yes, if you receive child benefit or child allowance for your child, you can enter their contributions to foreign health insurance in the child annex (line 31).
What happens if my employer pays for the foreign health insurance?
If your employer covers the costs, you can no longer claim them on your tax return, as you have not incurred any personal expenses.
Is there a difference between a short trip and a long-term stay?
For long-term international health insurances, the same tax principles apply: the decisive factors are the private or professional reason and compliance with the maximum amounts for private use.
Does my international health insurance need to offer specific benefits?
For full tax deductibility as basic insurance (if maximum limits are not exhausted), the coverage should correspond to the level of the German statutory health insurance (so-called social welfare equivalent level of benefits).
What evidence does the tax office require?
You need proof of contributions from your insurance. If your travel is for professional reasons, you also need evidence of the professional purpose of the trip. The data is often transmitted electronically if you have consented.
