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Wednesday, 07 January 2015 12:35

Summary of Tax Reform 2015

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reforma-fiscalThe current government increased the income tax rate PIT (Personal Income Tax) to reduce the great public deficit. In 2015 there will be elections and that will have an impact on taxes. That is why the tax reform is born.

In January 2015, the withholdings on wages will be reduced and therefore the net salary of all the workers will increase.

SALARIES: Currently, there are seven sections in taxes and they range from 24.75% to the maximum 52%. In 2015, the sections will be reduced to five with the minimum being 20% and the maximum 47%. Currently, 52% applies to incomes that exceed 300.000€; however, the maximum 47% in 2015 will start from 60.000€.

The tax cut is higher for the lower income sectors. However, as the gross salary increases, the reduction is lower.

FAMILY: In 2015 the personal and family minimums increase (to cover the basic needs of the taxpayers)

PATRIMONY: The tax on capital will continue. Taxes the net wealth exceeding 700.000€ and the usual home is exempt until an amount of 300.000€.

SALE OF PROPERTIES: In 2015 the correction for inflation disappears, this is to calculate the benefit, only the purchase and sales price will be seen, without considering the effect of inflation. There will be reduction of the benefit if the property was bought before 1995, and only for the first 400.000€ of the sale price.

RENT: For tenants, the deduction for ordinary rental properties disappears. The owners of a property to rent maintain the right to be reduced in personal income tax, 60% of the obtained benefits.

REDUCTION OF TAX TYPES: 2015 brings advantages for savers and investors as there will be a reduction of tax types that are applied on capital gains and income from savings.

DIVIDENDS: The first 1.500€ of dividends, are currently exempt from taxation, but will have to pay taxes in its entirety as from 2015.

Currently, the capital gains generated in less than 12 months are taxed on a general scale that can reach up to 52%. From 2015, the maximum tax will be 24%.

RETIREMENT PLANS: it is possible to contribute 10.000€/year to these plans to reduce the tax invoice - 12.500€ from the age of 50 – and will pass the maximum at 8.000€. Retirement plans are taxable when redeemed at age 65. It may be redeemed all at once, or as a life annuity, the latter being the most favorable option. If it is redeemed as a life annuity, monthly, its capital gains are taxed equally, but by being a regular income, it does not "inflate" the taxpayer's income.

SAVINGS PLAN 5: In 2015 the Savings Plans 5 appear. With them a person can contribute up to 5,000€ /year with tax exemption from taxation provided that the investment is maintained for five years.

COMPANIES: In 2015 the "reserve leveling" will appear in small companies. It will allow companies to "save" benefits to offset potential losses in the next five years. It has a limit of 10% of the profit.

In the Corporate Income Tax, certain deductions are eliminated.

The newly created companies will be able to pay a reduced rate of 15% already established by the Entrepreneurs Act. It will apply to the first 300.000€ of taxable income and will be 20% for the excess of that amount for two years: the first year with a positive tax base and the next.

AUTONOMOUS: The self-employed will have reduced tax rates. The current retention of 21% goes down to 19% in 2015 and 18% in 2016.

The new autonomous also have a reduction of 20% because of the performance of economic activities during the first two years of activity.

The module system becomes more restrictive this year, as it will be limited to 150,000€ revenue and 150,000€ expenditure, and the autonomous with a turnover below 50% to individuals, will be excluded.

DISMISSALS: Severance payments shall be taxed, as they do in all the European countries, except France. The Government established an exemption of 180.000€.

COMPANY MANAGERS. The retention of their salary will go from 42% which is currently 37% in 2015 and 35% in 2016.

RETENTION ON CAPITAL GAINS: (interests on time deposits, dividends, etc.) It is currently 21% and in 2015 it will be 20% and in 2016 19%.

RETENTION ON PROPERTY RENTAL COSTS: It is currently 21% and in 2015 it will be 20% and in 2016 19%.

Read 1471 times Last modified on Wednesday, 21 January 2015 16:25

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