The combined tax rates in the first bracket have been reduced with 0.05% to 33.60% while the rates in the second bracket have been raised with 0.45% to 41.85%. The rate for the third bracket stays 42% and the rate for the fourth bracket stays 52%. The brackets have also been extended.
|Combined rates in Box 1 for persons younger than 65
|Tax per bracket
Premium National Insurance
|Total rate||Total per bracket||Cumulative
|Of more than||But less than|
|€ 0||€ 17,579||2.45 %||31.15 %||33.60 %||€ 5,906||€ 5,906|
|€ 17,579||€ 31,589||10.70 %||31.15 %||41.85 %||€ 5,863||€ 11,769|
|€ 31,589||€ 53,860||42 %||42 %||€ 9,353||€ 21,122|
|€ 53,860||52 %||52 %|
For the year 2008 the tax rate for income from a substantial interest is changed back to 25% again. This rate was temporary reduced to 22% for the year 2007.
The tax rate for income from savings and investments stays 30%. Expats with the 30% ruling can opt to be exempted from taxation on savings and most of the investments.
After the tax has been calculated based on the above percentages you can reduce the calculated amount with the applicable tax credits.
|Personal tax credit||€ 2,074|
|Labour tax credit (max)||€ 1,443|
If you have children additional tax credits can apply. There are also other specific tax credits depending on your situation but the above are the common tax credits. The labour tax credit depends on the height of the salary and can be higher than € 1,443 if you are 57 years or older.