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Income tax: the new scale for 2021

Posted on April 28, 2021

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 €.

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