2022 Updates: Additional € 65 Deduction

News Flash No. 13/2022

Subject: 2022 Updates: Additional Gross Tax Deduction for Income Earners within the €25,001 to €35,000 Bracket.

The 2022 Budget Law has, inter alia, amended Article 13 of the Consolidated Income Tax Act, concerning the calculation of gross tax deductions, which are established differently based on the type of income contributing to total income.

For employment income and assimilated income, if the total income exceeds €25,000 but does not exceed €35,000, the applicable deduction is increased by an amount of €65.00.

This amount should be considered an upward corrective adjustment to previously re-proportioned deductions and must be paid, provided the aforementioned income requirements are met, in full during the year 2022, as a one-off payment, without any pro-rata adjustment to the period of employment within the year.

Consequently, the tax withholding agent must recognize the additional deduction of €65 from the first available pay period of 2022, it being understood that at the end of the year, or upon termination of the employment relationship, the agent must recalculate the actually due deduction in relation to the total remuneration paid during the tax period.

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