Proposed changes to the taxation of physical persons from 2019
Regarding physical persons, the government proposes changes to the tax rate and assessment of the tax base.
Introducing progressive taxation of all kinds of income and revocation of the solidarity tax increase
The tax rate for income below 1.5 million should be 19 per cent and the tax rate for income above that amount should be 24 per cent.
The solidarity tax increase, which is now applied to the income of employees and self-employed persons, should be revoked.
Revocation of employees' super-gross salaries
The tax base should be employee's gross income without deducted social security and health insurance.
Social security and health insurance as a taxable expense for self-employed persons
Self-employed persons would be able to deduct 75 per cent of paid social security and health insurance amounts. In addition, persons using expense allowances should be able to apply the deduction.
Regarding employees and self-employed persons, the changes will have more or less a neutral effect on the amount of their taxation with respect to the amount of their income. Contrary to this, persons with income from renting real estate and other income, e.g. from investing into securities, sale of real estate, etc., will be affected by the introduction of new tax rates, and their taxation will be higher.
