The recent Budget Law has introduced new caps on deductible expenses for individuals and families, particularly those with higher incomes. These changes aim to streamline the tax deduction process while still providing relief for certain expenses.

Income Caps and Deductions

Taxpayers earning above 75,000 euros will have a maximum deduction of 7,000 euros. For families, the caps increase based on the number of children. For those earning over 100,000 euros, the deduction limits are adjusted. Families with more than two children or those with a child with disabilities can benefit from higher caps.

Exempt Expenses

Health care expenses are exempt from the deduction calculations. Certain deductions accrued from previous years, such as mortgage interest and expenses related to renovations and energy upgrades, are preserved.

Fair Distribution of Tax Relief

The new mechanism incorporates a coefficient based on the number of children in a household to provide a fairer distribution of tax relief. The existing ceilings that were in place prior to the recent changes will remain effective, gradually decreasing from 120,000 euros and phasing out completely at the 240,000 euro threshold.

A More Equitable Tax System

These changes aim to simplify the tax deduction process while ensuring essential expenses remain accessible. The government seeks to create a more equitable tax system that acknowledges the diverse needs of its citizens.