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The new tax system delays economic growth

15 December 2012 / 18:12:16  GRReporter
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- have an annual income of more than 12,000 euro and have two children

- have an annual income of more than 10,000 euro and have three children

It should be noted that the new monthly burden is due to the removal of the non-taxable minimum for children and the new tax scale, which will apply as of 1 January 2013 and provides three rates: 22% for incomes of up to 25,000 euro, 32% for incomes of up to 42,000 euro and 42% for incomes of more than 42,000 euro.

This additional burden will not be accounted for either by the allowance of 40 euro, which will be given monthly for each child as a compensation for the removal of non-taxable minimum for children, or by the special allowances for three and more children, amounting to 500 euro per year per child, if family income does not exceed 45,000 euro. Moreover, family incomes will decline further after the removal of tax exemptions. Tax exemptions will only apply for medical expenses and donations, which decrease taxes by 10%.

Tax reduction based on the tax scale

Tax will be decreased for employees on a labour contract and pensioners:

- for incomes of up to 21,000 euro - by 2,100 euro. If the tax due is less than 2,100 euro, the reduction is limited to the amount of the tax.

- For incomes exceeding 21,000 euro, the reduction is 100 euro per 1,000 euro of the income, and until the amount of 2,100 euro is reached - for incomes exceeding 42,000 euro.

If the total amount of the reduction is greater than the tax resulting from the tax scale, the difference will not be returned or offset to the taxpayer or his/her spouse. When the tax due on the initial declaration is paid at once in the period of the first instalment, the tax is reduced by 1.5%.

Tags: taxes tax scale coefficient reduction incomes
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