Reduction in the income tax rate for selected taxpayers
The amendment will reduce the income tax rate from 21% to 15% for legal entities and natural persons with income classified under §6 (1) and (2) of the income tax act and with annual income (revenues) of up to EUR 100,000. This reduced rate will be applied to tax periods beginning on 1 January 2020 at the latest.
Increase in the non-taxable portion of the taxpayer’s tax base
The amount of the non-taxable portion of the taxpayer’s tax base is based on a multiple of the current subsistence minimum. This multiple of the subsistence minimum is set to increase from 19.2-times to 21-times beginning in 2020. Therefore, the non-taxable portion of the taxpayer’s tax base will be EUR 4,414.20 in 2020.
Change in the assessment base for social insurance premiums
In addition to the changes in the income tax act, the amounts of the minimum and maximum assessment bases used to calculate social insurance premiums will also be amended beginning in 2020. The new minimum assessment base for 2020 is EUR 506.50 with monthly insurance premiums for self-employed persons of EUR 167.89, while the maximum assessment base is EUR 7,091 with monthly insurance premiums for self-employed persons of EUR 2,350.66.
These new assessment bases apply to periods beginning in January 2020. Given that affected self-employed persons will first receive notification from the Social Insurance authority via letter or their electronic mailboxes in January 2020, the insurance premiums will be paid in the new amount beginning in February 2020.
