Tax on Rental Income & Capital to Rise, That on Labour to Fall (Slightly)

By , 03 Oct 2019, 17:32 PM Business
 Marinus van Reymerswale, "The Tax Collector" (1542) Marinus van Reymerswale, "The Tax Collector" (1542) Wikimedia

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STA, 3 October 2019 - The government confirmed on Thursday a package of tax tweaks that are meant to reduce taxes on labour to increase competitiveness. The list includes increased general tax credit and changes to the income tax brackets to reduce the tax burden on the middle class. On the other hand, the taxation of capital gains and rental income is to rise slightly.

 The changes, which the government wants passed in fast-track procedure so they can enter into force with the start of 2020, affect laws on personal income tax, corporate income tax and on tax on profit from disposal of derivatives.

Speaking of a "new step towards tax optimisation", the government said that the "proposed measure will additionally reduce the burdens on labour, whereby we are strengthening competitiveness, preserving a stable economy and contributing to sustainable economic growth".

In general, the changes are designed to increase take-home pay, which will be achieved with a higher general tax credit that all taxpayers are entitled to, by EUR 200 to EUR 3,500.

In an effort to reduce the tax burden on the middle class, the tax rate will fall by one percentage point both in the second and third brackets, to 26% and 33%, respectively.

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