What kind of expenses may be deducted
Deductions from taxable income include:
- basic exemption – in 2012 the amount of basic exemption was 1728 euros;
- increased basic exemption upon provision of maintenance to a child – in 2012 this amount was 1728 euros (starting from the second child);
- increased basic exemption in event of pensions – in the amount of the pension received but not more than 2304 euros a year;
- increased basic exemption in event of compensation for accident at work or occupational disease – in the amount of the compensation received but not more than 768 euros a year;
- housing loan interests, when a loan was taken for acquiring a housing for a taxpayer himself or herself;
- training expenses;
- gifts, donations – restrictions on deductions of 5% are applied;
- contributions to voluntary funded pension – limitation on deductions of 15 per cent is applied, but not exceeding 6000 euros;
- contributions to a mandatory funded pension and unemployment insurance (taken into account during a year, except contributions to a mandatory funded pension by sole proprietors);
- social security payments mandatory in a foreign state.
A taxpayer may deduct the housing loan interest, training expenses, gifts and donations in the total amount of 1920 euros but not more than 50% of the taxpayer's income during the same period of taxation.
If, upon withholding income tax, the tax incentives have been fully taken into account, submission of an income tax return is not required.