It remains to be seen when exactly people will receive the new tax credit. Both the Chamber of Employees and the Chamber of Trades recently issued an opinion, noting that the financial relief should be introduced sooner rather than later.
According to a statement from the Ministry of Finance, the goal is still to “vote on the tax credit before summer”.
It is simply a little extra money on your salary or pension, or after your tax return if you are self-employed. For an employee or pensioner earning around €4,600 gross per month, this will be an extra €44 net. For the self-employed, the tax credit is calculated on the basis of profit over the year.
Since the credit will come into force retroactively on 1 January 2023, people will likely receive several hundred euros in one go the first time.
At the tripartite meeting in early March, government and social partners agreed on this tax credit, which will correspond to an adjustment of the tax scale to two index brackets. The impact of inflation on households should thus be mitigated and the financial burden on households lightened. Basically, the taxpayer only gets money back: with each index bracket, you move up the scale and without any adjustment, there is less money left on the net. This is known as cold progression.
According to the Ministry of Finance, the credit will be introduced “as soon as possible” and before the summer. The text was drafted “in record time” and adopted by the government council at the end of March so that the procedure was able to be launched as quickly as possible. But, almost two months later, the president of the Chamber’s special tripartite commission, MP Gilles Baum, declared last week on RTL that he cannot proceed with the work until the opinion of the state council is available.
The council has indicated that the text is not yet on the agenda for the upcoming meeting next week, but this might still change. According to RTL sources, the government did not mention any “political priority” when it referred the matter to the state council.
If things speed up now and the tax credit is voted through in June, then employees and pensioners might receive their money in July. Otherwise, it will be in August.
As for the adjustment of the tax scale to inflation, that will be for next year. And the adjustment will be made only to 2.5 index brackets and not to eight as unions are demanding.
It should be added that other measures to combat inflation and boost purchasing power were agreed at the tripartite meetings, including a cap on energy prices and an increase in a number of allowances and subsidies.
