Medical education takes six to twelve years, depending on the specialisation. In none of those years are future doctors taught how to issue an invoice, what taxes a private practice pays, or what the healthcare VAT exemption means. As a result, every doctor who decides to open a private practice faces the same reality: the medical work is clear, but the financial side is shrouded in fog.
In 2026, the situation has changed, but not necessarily become simpler. The VAT exemption for healthcare services still raises the most questions, the Medical Institution Register demands specific documentation, and hiring staff in private practice creates additional tax obligations. This guide is for doctors, dentists, GPs, and other healthcare professionals who are starting or already running a private practice.
Healthcare Services and VAT — The Exemption That Is Often Misunderstood
The single most important tax aspect every doctor in private practice must understand: healthcare services are exempt from VAT. Article 52 of the Value Added Tax Law stipulates that VAT does not apply to the provision of medical care by healthcare professionals — doctors, dentists, nurses, midwives, and other certified healthcare specialists.
This means you:
Do not charge VAT to patients
Cannot deduct input VAT on your purchases (equipment, instruments, premises rent)
Are not required to register as a VAT payer, even if your turnover exceeds €50,000
The third point is especially important: for a normal business, VAT registration is mandatory if 12‑month turnover exceeds €50,000. For a doctor's private practice, this threshold does not apply — you can earn €200,000 a year and still not be a VAT payer.
Where the VAT Exemption Does Not Apply
The exemption applies only to medical care services. It does not apply to:
Cosmetic procedures that are not medically necessary (purely aesthetic dermatology, unless medically indicated)
Sales of dietary supplements, cosmetics, or hygiene products
Subletting of premises to other specialists
Training or consultancy services not directly related to patient treatment
If your practice also provides such services, you may need to apply 21% VAT to part of your activity — and that is where the more complex accounting begins.
Partial VAT Exemption — When Your Practice Provides Both Medical and Other Services
If your private practice, alongside medical care, also sells VAT‑taxable goods or services, you must be able to separate the two activities. For purchases used in both areas (e.g. premises rent, electricity), the input VAT must be apportioned proportionally.
For example, if 70% of your revenue comes from medical care (VAT‑exempt) and 30% from cosmetic procedures (VAT‑taxable), then only 30% of the input VAT on shared costs may be deducted.
In this situation, you have two options:
Not register for VAT, if your VAT‑taxable revenue is less than €50,000 per year.
Register for VAT and carry out proportional input VAT allocation.
SIA vs Self‑Employed — Which Is More Advantageous for a Doctor?
Most doctors begin private practice as self‑employed — it is simpler and cheaper. However, as income grows, an SIA becomes an increasingly attractive alternative.
Self‑Employed Doctor
Registers only with the State Revenue Service (SRS/VID) — no Commercial Register registration required.
Income is taxed with PIT (25.5% up to €105,300, 33% above) and social contributions VSAOI (31.07%).
Minimum monthly VSAOI contributions: €242.35 (in 2026).
No VAT obligations, if providing only medical services.
Cannot deduct expenses from PIT using the 10% regime (declared economic activity), which is only available for certain types of activity — medical care is not included. A doctor must use the general regime with expense deduction.
SIA for a Doctor
Registers with the Commercial Register; a separate legal entity.
Profit is taxed with CIT only upon distribution (20% standard regime or 15%+6% alternative regime).
Can pay yourself a salary (minimum €780 per month) and additionally distribute dividends.
Can deduct all practice‑related expenses — premises rent, equipment, salaries, insurance.
Liability is limited to the share capital — important where professional liability risks exist.
When an SIA Is Advantageous for a Doctor
An SIA becomes more advantageous if:
Annual income exceeds approximately €40,000–50,000.
You plan to purchase expensive equipment (ultrasound machine, X‑ray unit, dental chair) — an SIA can deduct depreciation.
You plan to hire staff — an SIA is better suited to being an employer.
You wish to separate personal assets from professional risks.
Medical Equipment Acquisition and Depreciation
Medical equipment is expensive, and its acquisition cost cannot be expensed all at once — it must be recorded as a fixed asset and depreciated over several years.
Depreciation periods for typical medical equipment:
Computer hardware and software: 3–5 years
Medical equipment (ultrasound machines, ECG, sterilisers, dental units): 5–10 years
Furniture and office equipment: 5–10 years
Premises renovation and adaptation: 10–20 years
For a self‑employed doctor, depreciation reduces the income subject to PIT. For an SIA, depreciation reduces the company's profit. In both cases, it is a significant tax optimisation tool.
An important nuance: if a doctor is a VAT payer (e.g. due to the partial VAT regime), input VAT on equipment purchases can only be recovered in proportion to the share of VAT‑taxable activity.
Hiring Staff in Private Practice
If your private practice grows, you may need staff — nurses, receptionists, other doctors. Hiring staff creates additional tax obligations and an administrative burden.
Total employer cost for one employee with a gross salary of €1,500:
Gross salary: €1,500
Employer social contributions (23.59%): €354
Business risk duty (0.36%): €5
Total: €1,859 per month
Additionally:
An Employer Report must be filed by the 17th of the month.
Taxes must be paid by the 23rd of the month.
Mandatory health checks must be provided (at the employer's expense) — especially important in the healthcare sector, where these checks are specific.
Employment contracts, job descriptions, and workplace rules must be prepared and maintained.
Licensing Requirements and How They Interact with Accounting
To provide healthcare services, a doctor needs their practice to be registered as a medical institution with the Health Inspectorate. Registration requires:
A doctor's certificate in the relevant speciality
An assessment of the premises' suitability (hygiene requirements, accessibility)
A list of medical equipment and conformity certificates
A waste management contract (for medical waste)
Civil liability insurance
Your accounting records must be able to demonstrate that all required certificates and licences are valid, because their absence can lead to the suspension of your activity and even criminal liability. Moreover, the costs of obtaining and maintaining licences and certificates (continuing education courses, certification fees) are deductible as business‑related expenses.
The Most Common SRS Mistakes Made by Private Practices
Incorrect accounting for transactions with insurance companies. Many doctors contract with insurers and receive payments for treating patients. These transactions must be recorded in the same way as any other revenue, and they must not be mixed with direct patient payments.
Allocating premises rental costs. If a doctor rents premises used for both practice and private purposes, the proportion must be separated. Otherwise, the SRS may challenge the expense deduction.
Gifts and representation expense limits. Gifts for patients or dinners with cooperation partners are representation expenses, subject to the 5% cap of total gross wages.
Incorrect VAT application. Medical services are exempt from VAT, but if the practice also sells cosmetics, dietary supplements, or other goods, VAT must be applied. Not knowing where the exemption ends and the taxable transaction begins is a common mistake.
No separation of personal and practice expenses. A doctor who uses the same card for personal and practice expenses faces chaos at year‑end. A separate bank account for the private practice is essential.
Accounting Software Suitable for Private Practice
For a small private practice with a few hundred transactions a month, standard accounting software is suitable: Jumis, Horizon Cloud, Visma. Larger clinics with several doctors, staff, and a more complex cost structure may need customised software.
The key features to look for:
The ability to separate VAT‑taxable and VAT‑exempt transactions (if there is a partial exemption)
A payroll module with automatic social contribution and PIT calculation
Fixed asset accounting with depreciation calculation
EDS integration for filing returns
A doctor's private practice is complex not only medically but also financially. The VAT exemption, equipment depreciation, staff payroll, and licensing requirements create an environment where professional accounting support is not a luxury — it is a necessity. Our team specialises in medical sector accounting and helps doctors focus on what they do best — treating people.
Last updated: June 2026. Information is based on the Value Added Tax Law, the Medical Treatment Law, official SRS materials, and the requirements of the Health Inspectorate.
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