Individual tax & personal income tax

You can file your personal income tax online until July 15, 2025.When earning professional income as a self-employed, you need to file your personal tax return by October 16, 2025.

This applies to specific situations, such as when you earn income as a self-employed or declare foreign real estate for the first time.

As a company director, your remuneration often falls into the highest bracket of personal income tax. However, there are various ways to optimize your compensation from a tax perspective.

• For example, you can pay yourself a fixed expense allowance for professional costs or build up an additional pension through the company.
• Meal vouchers and a company car are also effective methods for tax optimization.
• Additionally, the payment of dividends can be done in a tax-efficient way.

Our experts are happy to assist you in developing personalized optimization strategies.

Student entrepreneurs follow the normal rules of personal income tax. A student entrepreneur is entitled to reduced social security contributions in some cases.

• Is your net annual taxable income less than €8,430.73? Then you are entitled to an exemption from social security contributions.
• Is your net taxable annual income between €8,430.73 and €16,861.46? Then you pay a reduced social security contribution of 20.50% on all income above € 8,430.73.
• Is your income higher than €16,861.46? If so, you are required to pay social security contributions of a self-employed person as a principal activity.

Are you purchasing office supplies or attending a professional training? In many cases, these expenses can be deducted from your personal income tax. Please note, however, that not all costs are fully tax deductible.

As a sole proprietor, it is advisable to make advance tax payments. By paying these tax prepayments in on time, you can avoid a tax surcharge. Additionally, spreading out these payments can help improve your cash flow.

The deadlines for prepayments are as follows:

•  quarter 1: before 10/04
• quarter 2: before 10/07
• quarter 3: before 10/10
• quarter 4: before 22/12

Starting companies are exempt from tax surcharges for insufficient tax prepayments during the first 3 years.

Depending on the specific situation, income from crypto currencies can be classified in different ways. Each situation must be assessed individually. The tax classification can be as follows:

• normal management of private assets (0% tax)
• miscellaneous income (33% tax)
• professional income (progressive tax rates)
• investment income (30% withholding tax)

The new 10% capital gains tax will also impact crypto currency profits.

One of the main differences is that the income of a sole proprietorship is subject to personal income tax.

The income of a company, on the other hand, is subject to corporate income tax. As a director of your company, you can then optimize your personal income through personal income tax by receiving a remuneration or dividend, among other things.

Personal income tax rates are progressive. This means that higher income is subject to higher tax rate.

Below are the rates for assessment year 2025 (income year 2024). These apply to individuals, self-employed individuals and self-employed individuals, as a secondary occupation.

• Tax-free amount: up to EUR 10,910
• Up to €16,320: 25%
• From €16,320: to €28,800: 40%
• From €28,800 to €49,840: 45%
• From €49,840: 50%

Example
Suppose you have a taxable income of €41,200 (this is after deducting professional expenses).

• On the first bracket, you pay 25% taxes (up to €16,320), but you must also take into account the tax-free allowance of €10,910.
  • € 16.320 – € 10.910 = € 5.410
  • 25% of €5,410 = €1,352.50
• On the second bracket (€16,320 to €28,800), you pay 40% taxes.
  • 40% of €12,480 = €4,992
• On the third bracket (€28,800 to €41,200), you pay 45% taxes
  • 45% of €12,400 = €5,580

The total tax you pay in this case is €11,924.50 (€1,352.50 + €4,992 + €5,580). Municipal taxes will be added on top. The municipal surcharge depend on the municipality where you reside.