(Brief Overview)
From imposing higher income tax rates on banks to the exclusion of alcoholic beverages from the 10% VAT bracket, the new consolidation package brings a vast amount of changes with the goal to bring an extra of 1,5 billion € into the national budget. In this post, we introduce the five amendments that we found might have the most pronounced and direct impact on entrepreneurs and small businesses alike.
1. Reinstation of 'Tax Licences'
The amount of ‚tax license‘ or the minimum income tax for incorporated entities effective from the 2024 fiscal year will depend on the taxable income bracket of the entity.
Minimum tax payable brackets
| Taxable income | Minimum tax payable |
| up to 50.000,- € | 360€ |
| 50.000,01 € – 250.000,- € | 960€ |
| 250 000,01 – 500.000,- € | 1.920€ |
| 500.000,01- € and more | 3.840€ |
Companies which employ handicaped workers and whose workforce consists of at least 20% of such employees are eligible to a 50% relief from the tax licence amount.
If a company’s accounting tax liability is lower than the amount stated as the minimum tax payable, the difference can be used to decrease the tax liability in up to 3 fiscal years following the year in which the minimum tax was paid.
2. Dividend tax rate
The withholding tax on dividends will increase from 7% to 10% in 2024.
3. 'Micro taxpayer' threshold
The income threshold for retaining the status of a ‚micro taxpayer‘ or the taxpayer eligible for the 15% income tax rate changes from 49.790,-€ to 60.000,-€ in 2024.
Other conditions related to the eligibility of the status remain unchanged.
4. Health insurance - new rates for employers and sole traders
The health insurance rates will increase for sole traders and employers alike.
New % health insurance rates valid from 01.01.2024 are as follows:
% rate - health insurance in 2024
| Type of HI Payer | Disability? | |
| Yes | No | |
| Sole trader | 7,5% | 15% |
| Employer | 5,5% | 11% |
| Employee | 2,0% | 4,0% |
Sole traders who do not exercise their activity besides employment are subject to a minimum health insurance levy of 97,80- € (for non-handicapped entrepreneurs).
Minimum monthly HI for self-employed workers WITH a handicap is 48,90- € in 2024.
5. Cryptocurrency Tax Rates for individuals (postponed)
The initial proposal envisaged the abandonment of the CFC rules for individuals as well as a lower taxation and insurance levies on the income related to the sale of these virtual assets by individuals.
The Income Tax Act no. 595/2003 Col. (further on as ‚the Code‘) defines cryptocurrencies as ‚a digital carrier of value‘, subject to a number of other criteria such as being neither issued nor guaranteed by a Central Bank, nor any other public authority.
What is more, the Code now recognizes terms such as ‚stable coin‘ and ‚staking‘.
The planned proposition stated that the income gained from trading virtual assets (less than 1 year between the date of purchase and the date of sale) would have been subject to income tax at 19% and 25% rate depending on the realized amount.
In contrast, selling the virtual asset later than 1 year after the date of purchase would be subject to 7% tax rate only.
Furthermore, a profit of up to 2.400,-€ on the value of the cryptocurrency on the day of realization eg. buying goods, assets or services in exchange of crypto, would have been tax exempt.
The proposition in its original wording has, however, been dismissed.
Posted by UP KABINET s. r. o. on: 30/12/2023
