Personal Taxes

Taxes 2022, new brackets and personal revenue tax charges: how a lot we pays

A big news of 2022 is that with the new Budget Law the tax on the income of natural persons is reformed, the so-called IRPEF. The Draghi government has decided to carry out a very substantial intervention, which redefines rates and brackets, and reorganizes and harmonises the deductions for income from employees and similar, but also from self-employment and pensions.

The government explained that this reform “does not claim to represent a comprehensive and definitive reform of the tax, since, among other things, the rules for defining the tax base have remained unchanged”. The approach adopted was to not only touch specific audiences, but benefit all taxpayers in general Italians also starting a work of rationalization of the tax.

Irpef, what critical issues

As highlighted by many observers, the issue of defining the tax base presents various critical elements linked, above all, to its progressive erosion over time. This has, in fact, transformed the personal income tax from a comprehensive income tax into a levy almost exclusively concentrated on income from employment and retirement.

On the other hand, the government observes that the budget law cannot and must not represent the venue for an overall tax review, which instead requires an in-depth analysis and discussion within a broader framework, such as that of a delegation law.

In addition to the reform of the brackets, they were also in the maneuver the deadlines for approving the regional and municipal surcharges have been deferred to 31 March 2022 which must be aligned with the new income tax brackets. As regards the municipalities, in the event that the deadline for approving the budget for the year 2022 is postponed to a deadline subsequent to that of March 31, it is necessary to refer to the alignment to the new deadline.

How Irpef changes in 2022

Let’s see in particular how the legal rates are changing, from 5 to 4while maintaining the levels of the minimum (23%) and maximum (43%) rates.

Another novelty is that the 41% tax rate disappears, while the rate for the second bracket is reduced by 2 points and the rate for the third bracket, whose upper limit drops by 3 points.

The reduction of 3 percentage points of the legal marginal rate on the third bracket is functional to ensure benefits for taxpayers in the range between 28 and 50 thousand euros. In a tiered system, this benefit grows with the increase in income in that band and, therefore, is greater precisely for those individuals (between 35 and 50 thousand income) who had not benefited from the interventions in the recent past.

To compensate for this change, on the one hand, the reduction of the legal marginal rate of 2 points (from 27 to 25%) on the second bracket was introduced and, on the other hand, the unification of the last two brackets starting from 50 thousand euros with the application of the legal marginal rate of 43%.

The new income tax brackets 2022

Here is the detailed comparison between the 2021 and 2022 rates and how much we will pay in taxes based on our income.

Irpef brackets and rates 2021

  • 23% up to 15,000
  • 27% from 15,000 to 28,000
  • 38% from 28 thousand to 55 thousand
  • 41% s from 55 thousand to 75 thousand
  • 43% above 75 thousand.

Irpef brackets and rates 2022

  • 23% up to 15 thousand
  • 25% from 15 thousand to 28 thousand
  • 35% from 28 thousand to 50 thousand
  • 43% over 50 thousand.

Deductions 2022

The deductions for the main types of taxpayers are modified by increasing the amount and expanding the income brackets for which they apply:

  • the income up to 15 thousand euros they will continue to receive the 100 euro personal income tax bonus
  • the income from 15 thousand to 28 thousand they will receive the bonus of 100 euros based on the amount of deductions due. Starting from this threshold, the bonus is incorporated into the deduction, which is progressively reduced to 0 in correspondence with an income level of 50 thousand euros.

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