A 'FISCAL reform' lowering income tax is due to come into force in January after having been given the final seal of approval today (Friday) by the Council of Ministers.
Levels and divisions of personal income tax, known as IRPF, will be reduced and the upper quartile will go down from 52 per cent to 45 per cent.
The first 12,000 euros – rather than 11,000 – will be exempt from income tax, and anything above this up to the upper quartile threshold will be taxed at 24 per cent rather than 24.75 per cent.
As a result, they will be back to pre-September 2012 levels, when taxes rocketed for everyone across all income levels.
Tax retentions practised by corporate clients on behalf of the self-employed upon receipt of their invoices stood at 15 per cent of the total billed for many years, but were upped to 21 per cent in September 2012.
These will now drop to 19 per cent, meaning for every 1,000 euros billed, the self-employed worker will get 810 euros instead of 790 euros.
Social Security contributions for the self-employed, currently a flat rate of around 270 euros, have not been touched, and neither has IVA which increased in the summer of 2010 from 16 per cent to 18 per cent and two years later to 21 per cent.
At this time, many goods and services which previously attracted lower-rate IVA of four or seven per cent – the latter raised to 10 per cent – were moved into the top-rate bracket of 21 per cent, and included necessities such as school textbooks, funded by pupils' parents.
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