Šipka

Contribution paid to life insurance – itemized deduction from the personal income tax base

12. 7. 2023

The taxpayer is entitled to reduce his tax base by the amount of his/her contribution to private life insurance. The maximum reduction can be in the total amount of 24 000 CZK annually, also in the case when the taxpayer has multiple life insurance contracts.

The taxpayer has to meet the requirements to be entitled to the reduction of the tax base. In the cases when the requirements are not met, the insurance company does not provide the confirmation needed.

If the insurance contract is terminated prematurely, the entitlement to the reduction of the tax base expires. The total reduction of the tax base in the previous 10 years has to be taxed subsequently. The exception is the situation when the taxpayer becomes entitled to retirement pension or invalidity pension of the third grade or when the taxpayer has invalidity of the third grade according to the Pension surrender Insurance Act or in the case of taxpayer´s death. There is also no subsequent taxation when the insurance claim or has not been paid and at the same time the surrender is directly transfered to another private life insurance contract, which meets the requirements for the tax base reduction.

The taxpayer proves the entitlement to the tax base reduction by presenting a confirmation of the private life insurance payment issued by an insurance company. This confirmation has to be enclosed to the income tax return form.

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