Changes in 2018 Individual Income Tax

In 2018, the delivery of the Individual Income Tax has, once again, changes that will affect everybody. Here are the most significant changes:

1 - Intermediate classes pay less
In 2018, we again have seven IRS grades:
- First step: up to € 7,091, with an applicable income tax of 14.5%;
- Second tier: more than € 7,091 and € 10,700, with an applicable rate of 23%;
- Third tier: from more than € 10,700 to € 20,261, with an applicable rate of 28.50%;
- Fourth tier: from more than € 20,261 to € 25,000, with an applicable rate of 35%;
- Fifth step: from € 25,000 to € 38,856, with an applicable rate of 37%;
- Sixth step: from more than € 36,856 to € 80,640, with an applicable rate of 45%;
- Seventh tier: over € 80,640, with an applicable rate of 45%


2 - Increase in the value of the Minimum Threshold of Existence
In 2017, the Minimum Existence Threshold was € 8,500. In 2018, it will be 8,890 € and whoever has income up to this amount, will be free of tax.


3 - End of surcharge
The lower echelons saw the surcharge finish in previous years and this year ends for all echelons.


4 - Green receipts with several changes
Anyone who earns more than € 27,360 per year has, as of this year, to present expenses and justify 15% of income through expenses. However, the coefficients of 0.75 for most professions and 0.35 for local housing remain.
Another novelty is that from 2018, green receipts will be covered by the Minimum Threshold of Existence, and if they earn less than € 8,890, they will be exempt from IRS.


5 - Minors and working students pay IRS
Higher and high school students who work during the vacation months will see their income be taxed on IRS, with a 10% applicable rate.

 

6 - Deductions
By 2018, separate parents can share their expenses with their children. students up to the age of 25 who live outside the hometown can deduct the value of the rent from the housing; shared transport costs may, this year, be deducted.


These are the key changes to the IRS for 2018. If you continue to have questions, you can always check out more information available on the Finance Portal or our article that explains how you can deliver the IRS and the professionals you can turn to to help you organize with all these changes.

 

 

 

 

 

 

 

 

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