The top tax rate of 55 percent for incomes over one million euros will be extended for another four years. The tax brackets up to the highest level will be increased by 3.84 percent, which will accordingly raise the income limits.

Government Introduces New Levies and Fee Increases

The betting fee will see a significant increase from 2.0 to 5.0 percent, which is expected to generate additional revenue of about 50 million euros. The tobacco tax will also be increased and extended to heated tobacco. Additionally, the bank levy and the contribution from energy companies will be raised.

Elimination of Tax Benefits

Several previous tax benefits will be eliminated: The VAT exemption for smaller PV systems will be abolished, and the exemption from the motor-related insurance tax for electric cars will be removed. For electric car owners, this means additional costs of up to 400 euros annually on average.

As compensation, a rent price freeze in regulated tenancy law has been decided, which suspends the rent increase planned for April. The educational leave will be replaced by a new model expected to come into effect in 2026.

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