The Ministry of Finance published the first details of the planned Tax Reform on 20 March 2015. The amendments will generally be applicable with effect from 1 January 2016.
Main changes of the reform are as follows:
Individual tax:
- Reduction of the initial tax rate for the lowest bracket from currently 36.5% to 25% for individuals.
- Introduction of new tax brackets for individuals and the new top rate of 55% will be applicable only temporarily. Initially, it is planned to keep this rate for the following 5 years.
- Increase of the child-related deduction from EUR 220 to EUR 440 annually.
- Increase of the amount of tax-free employee participation in companies from EUR 1,460 to EUR 3,000 annually.
Corporate tax:
- Increase of the withholding tax on investment income from 25% to 27.5%. However, the withholding tax rate on savings income will remain at 25%.
- Increase of the capital gains tax rate on the sale of real estate from 25% to 30%.
- Introduction of a single depreciation rate of 2.5% for buildings.
- Increase of the invention premium from 10% to 12%.
- Changes to the real estate transfer tax rate by introducing a different rate structure.
- Instead of the single rate of 3.5%, transfers of property with a value of up to EUR 250,000 will be subject to a rate of 0.5%, transfers with a value of up to EUR 400,000 will be subject to a rate of 2% and transfers with a value of more than EUR 400,000 will be subject to a rate of 3.5%.
