No form, no deduction
The T.D.59 is the declaration with which employees claim their personal allowances from their employer. It is completed at the start of the year and submitted there.
The consequence when it is missing is clear: the employer grants no allowances. The monthly payroll deduction is calculated without them.
Conversely: the employer must submit declarations for all employees, regardless of income level. It is not enough for the employees to complete them.
What was added in 2026
The reform expanded the catalogue of deductions considerably. Four groups are new:
| Deduction | Amount |
|---|---|
| First child or student | €1,000 |
| Second child | €1,250 |
| Third and each further one | €1,500 |
| Rent or mortgage interest | up to €2,000 |
| Green investments, including electric vehicles | up to €1,000 |
| Natural disaster cover on a home | up to €500 |
The child deductions depend on household income:
- up to €100,000 with one or two children
- up to €150,000 with three or four
- up to €200,000 with five or more
Above those limits the deduction falls away.
The bigger effect is elsewhere
For many employees another change weighs more than the individual deductions: the tax-free allowance rose from €19,500 to €22,000. Above that the bands of 20, 25, 30 and 35 % apply.
Unlike the new deductions, the allowance works with no conditions and no evidence. Everybody gets it.
What we could not substantiate
- The deduction for rent. Most sources quote €2,000, one older presentation €1,500. The latter arose while the reform was not yet enacted and is presumably out of date. We follow the majority.
- The conditions in detail. Several sources point out that the new deductions are tied to particular requirements and caps that do not follow from their name. We did not check them against the statutory text.
- The treatment for the self-employed. Whether and under what conditions the new deductions are claimed in your own return we did not separately examine.
Anyone wanting to use the deductions should know the conditions beforehand and not first at the return: Cyprus setup from one place.
What runs alongside
The T.D.59 concerns the payroll deduction. Alongside it run the employer’s filings, in particular the monthly payroll tax filing and the annual employer’s return T.D.7, see the guide to the T.D.7.
What arises in payroll overall is in the guide to payroll. Which other rates and bands the reform moved is in the guide to the 2026 tax reform.
In Volk Accountant, payroll runs in the same books as invoices and receipts, and the reports show both for the same period, instead of payroll standing as a separate island alongside.