According to a document released by the Directorate-General of the Budget, direct tax refunds, which include corporate income tax, amounted to 1.666,4 million euros by May. This compares with 2.325,1 million euros in the same period last year.
The submission of personal income tax returns officially began on April 1 and concludes today.
The first refunds started reaching taxpayers as early as April.
This annual tax return reflects several changes made to the personal income tax in 2024, initially through the State Budget for that year (OE2024) and subsequently through a set of amendments passed in parliament in the summer of the previous year.
These involve rate reductions affecting tax brackets, initially covering the first five brackets through OE2024, with an additional reduction of 0.25 to 1.5 percentage points for the first six brackets.
In 2024, the limits of the tax brackets were updated by 3%, with changes that updated the minimum tax-exempt amount and the specific deduction (previously frozen at 4,104 euros for several years).
Most of these changes in personal income tax have already been reflected in the withholding tax tables, resulting in lower monthly deductions for each taxpayer compared to previous years.
The reduction in monthly tax withholding throughout 2024 (essentially a prepayment by workers and pensioners to avoid paying the full amount when submitting the annual tax return) will impact the value of refunds or any outstanding tax liabilities.
State tax revenue reached 24.034,6 million euros by May, marking a 13.2% increase compared to the same period in 2024.
“The growth in tax revenue was mainly due to the performance of personal income tax (17.7%) and VAT (9.1%), and to a lesser extent, corporate tax (42.9%), property transfer tax (35.5%), fuel tax (14.1%), and tobacco tax (27.4%),” reads the budget execution summary.
