The new tax reform is a good move for the system. It lowers taxes and adds more deductions. But it doesn’t mean everyone will have more money right away, especially those with low wages. It does increase disposable income, giving people more cash for daily expenses.
The new tax reform passed by Parliament brings big changes for individuals, businesses, and everyday life. For individuals, the tax-free threshold goes up to €22,000. The new income scale has rates of 20% for incomes up to €32,000, 25% for incomes up to €42,000, 30% for incomes up to €72,000, and 35% for those earning over €72,001. This means taxpayers with low and middle incomes will see less tax taken out, boosting their disposable income even if salaries stay the same.
The reform also offers deductions for children or students. The first child or student gives a tax relief of €1,000, the second €1,250, and the third and each additional member €1,500. Plus, citizens can get deductions of €2,000 for loan interest or rent, €1,000 for green investments like buying an electric vehicle, and €500 for home insurance. Families earning between €100,000 and €200,000, depending on how many children they have, can claim these deductions. This helps boost family income and manage expenses better.
Businesses and shareholders also see important changes. The corporate tax rises to 15%, and the loss carryforward period extends to 7 years. This gives businesses more flexibility with their finances. The maximum deductible entertainment expenses are now set at €30,000. The special defense contribution on distributed dividends drops from 17% to 5%, which increases shareholders’ net income. A fixed rate of 8% on cryptocurrency profits is also introduced. Plus, the defense contribution on rental income is completely removed, making things easier for investors and property owners.
The Tax Department can now act quickly against tax evasion. This protects those who pay their taxes correctly and makes the system fairer.
The reform also improves transparency and efficiency in tax administration. All citizens aged 25 to 71 must file a tax return. Those who pay electronically can enter state lotteries as a reward.
Overall, the new reform makes the tax system more simple, fair, and friendly for citizens. It offers real benefits by providing more money for daily expenses. However, not everything is perfect. For low earners, tax relief doesn’t mean much. The real challenge is still the wage increase. This is needed so that the reform truly becomes fairer and improves citizens’ income and quality of life.
