On 11 December 2024, the Chamber of Deputies approved bill no. 8414 on the ‘Entlaaschtungs-Pak’. The relevant provisions were published in the Journal Officiel and thus came into force on January 1, 2025.

Here's what this ‘tax package’ provides in particular to restore more purchasing power to households:

  • Review of the tax scale: adjustment of the income tax scale by 2.5 index brackets on 1 January 2025, this is aimed primarily at low incomes. Indeed, a tax exemption is planned for all people earning the non-qualified minimum social wage, regardless of their tax class.
  • Revaluation of the CIM (Crédit d'Impôt Monoparental) and the CISSM (Crédit d'Impôt Salaire Social Minimum).
  • Increase in the allowance for extraordinary expenses for children not forming part of the household.
  • Tax deductibility of all interest on home loans for the acquisition of an existing home.
  • Introduction of a ‘young employees’ bonus: Under-30s with their first permanent contract will be entitled to a bonus of between EUR 2,500 and EUR 5,000 (depending on their salary), 75% of which will be tax-exempt.
  • Introduction of an ‘overtime tax credit’ for cross-border workers (maximum EUR 700/year under certain conditions).
  • Increase in the participation premium (“Prime Participative”) mechanism:
    • Increase in the amount that can be distributed among all the company's employees (7.5% of the positive result of the previous operating year compared with 5% today).
    • Increase the ceiling on annual remuneration eligible for exemption to 30% (compared with 25% today).
  • Review and simplification of the impatriate regime: gross annual remuneration capped at EUR 400,000 will be 50% tax-exempt. Exit the impatriate bonus and the costs generated by the impatriate's move.
  • A one-point reduction in the rate of community income tax (IRC).
  • Etc.

 

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