Income tax cut: 14% bracket rate lowered to 11%
The 2020 Finance Act lowers the rate of the second income tax bracket from 14% to 11% and sets this bracket at €10,064–€25,659 per share. It reforms the tax reduction for low incomes (slope set at 45.25%) and abolishes the 20% means-tested tax reduction. For the 41% and 45% brackets, lower thresholds neutralise the gain. The cut is built into withholding tax rates from 1 January 2020.
Measure originators
A positive amount is revenue or savings for public finances; a negative amount is a cost or lost revenue.
Measure impact
Affects taxable households in the 11% bracket and, with a cap, those in the 30% bracket. The impact assessment estimates a €5bn reduction in income tax revenue from 2020, felt from January 2020 through withholding tax.
Official references
Sources
Procedure timeline
Follow the progress of this fiscal measure through the different stages of the parliamentary procedure.
Administrative implementation
Entrée en vigueur de la mesure et mise en œuvre par l'administration
President of the Republic signature
Publication au Journal officiel
Possible referral to Constitutional Council
Décision de conformité / censure partielle
National Assembly has the final say
Si échec CMP
Joint committee
Désaccord éventuel
Debate and vote
Debate and vote
Débat et vote en séance publique à l'Assemblée nationale, ou engagement de la responsabilité du Gouvernement (article 49.3)