New withholding tax model
The Ministry of Finance indicates that the application of these new tables will result, for most taxpayers, "in a net monthly increase in relation to the amount they earned in the first half of the year.
The new withholding tax model goes into effect on Saturday, July 1, with the government intending the changes to ensure that an increase in gross income corresponds to an increase in net income.
"This new model aims to ensure the fulfillment of two fundamental objectives: to ensure that an increase in gross income always corresponds to an increase in net income at the end of the month; to ensure a greater and increasing approximation of the value of withholdings to the value of the IRS assessed through the submission of the IRS Model 3 declaration," says the Ministry of Finance.
According to the government department, this new model is, in practice, an approximation of the amount withheld throughout the year of the amount to be paid annually.
The Ministry of Finance indicates that the application of these new tables will result, for most taxpayers, "in a net monthly increase in relation to the amount they earned in the first half of the year.
In the release, three simulations are presented: single with no dependents, single with one dependent, and married, two holders, with one dependent.
In the case of a single-person household, monthly net gains over the first half of the year range from 1% to 2% for gross salaries between 760 euros and 3400 euros, while a single person with one dependent may see his or her net salary increase by 2% to 5% for the same salary range.
In the case of a couple with one dependent, the net gain is balloted between 1% and 3% on these gross incomes and against the first six months of the year.
New withholding taxes increase net income
The new withholding tax model comes into effect, applying to income from dependent employment (Category A) and pensions (Category H).
