New fiscal measures
What do the new tax measures of the program law regarding the budget statement of 2021 mean for you as a citizen? We have prepared a brief overview for you.
Below you will find an overview of the measures that might be implemented and which could have an impact on your personal income tax.
Non-indexation of tax reductions
For the income years 2020 to 2023 the annual indexation of certain tax reductions and tax exemptions will not be applied, as is normally the case. In concrete terms, this means that the maximum amounts for these tax reductions will remain at the level of 2019.
As an exception, the maximum amount for pension savings will be indexed in 2020. This means that in 2020 you can save up to EUR 990 in pension savings at 30% tax relief and up to EUR 1.270 at 25% tax relief. From 2021, the indexation for pension savings will also be frozen until 2023.
With this measure, the government is trying to save so that other expenses can be financed, including the extra expenses in the health sector as a result of the COVID-19 crisis.
Adaption of tax reduction for childcare:
The government wants to alleviate the costs of childcare. The maximum amount per childcare day and per child will be increased from EUR 11,20 to EUR 13 in 2020. This amount will be indexed annually, which has not been the case until now. The 45% tax reduction would also be increased by a further 30% for single parents (depending on their income). In addition, the age limits will also be raised: from 12 to 14 years and from 18 to 21 years.
From now on, expenditure on professional home care for sick children will also be eligible for a tax reduction. A certificate remains required to benefit from this tax reduction.
Tax free amount for care for a family member
Any taxpayer who takes in a family member to take care of, will be able to benefit from an increased tax-free amount as of income year 2020. This is the case when it concerns a dependent (grand)parent, brother or sister older than 65 years who is in need of help.
The program law puts an end to the system of fiscal and social regularization, as of the first of January 2024. A taxpayer who wants to rectify an illegal tax situation will have until the end of 2023. After this date, fraudsters will be prosecuted administratively and criminally.
The Central Point of Contact (CPC) is a central database containing information on bank account numbers and certain financial contracts held by private individuals and legal entities. According to the program law, it will now also be mandatory to provide data on the balance of the same bank accounts and contracts. The purpose of this is to expose and combat tax fraud even more effectively.