The brackets of the progressive scale used to calculate the 2020 income tax are revalued by 0.2% as of January 1, 2021. This revaluation is set according to the evolution of consumer prices excluding tobacco in 2020 compared to 2019. People who declare more than €10,084 in income over the year will have to pay income tax (instead of €10,064 last year). This is stated in Article 4 of the Finance Act for 2021.
The new income tax scale has revised ceilings:
-
for the 2nd tax bracket, an income ceiling increased to €25,710 (instead of €25,659 for the previous year) ;
-
for the 3rd bracket, an increase in the ceiling to €73,516 (instead of €73,369).
|
Progressive tax scale applicable to 2020 income |
|
|
Fraction of taxable income (for one share) |
Tax rate to be applied to the corresponding bracket |
|
Up to €10,084 |
0 % |
|
From €10,085 to €25,710 |
11 % |
|
From €25,711 to €73,516 |
30 % |
|
From 73 517 € to 158 122 € |
41 % |
|
From 158 123 € onwards |
45 % |
How is the income tax calculated?
The amount of tax is calculated from the net taxable income by:
-
dividing the net taxable income by the number of units;
-
applying to this result the progressive tax scale by bracket;
-
multiplying the result obtained by the number of family quota units to obtain the amount of tax due.
For example, a married or civil union couple with two minor children has a net taxable income of €55,950.
This couple has 3 units (2 units for the couple and a half unit for each child), the net taxable income of 55 950 € is divided into 3 = 18 650 €.
The scale is then applied to the 18 650 €:
-
income bracket up to 10 084 € taxed at 0% = 0
-
income bracket 10 085 € to 25 710 € taxed at 11% : 8 565 € (obtained by calculating 18 650 – 10 085) x 11% = 942,15 €.
