It’s a new year and that means some things; people begin their diets, people join gyms only to refuse go a few months later, and changes to the tax system in many countries!
The biggest of these tax reforms (maybe not the biggest, but certainly the most talked about) is the United States’ new tax reform, the largest tax reform bill for the United States in more than 30 years. Trump’s first big win of his presidency was greeted with mixed reviews from the citizens of the US. Changes in this sweeping tax reform include a shuffling of the tax brackets, a flat 21% corporate tax, nearly doubling the standard deduction and removing the personal exception, and changes to the way that inflation is calculated.
Italy has made changes to their VAT rates. In 2017, the VAT rates in Italy were 22% for the standard rate and 10% for the reduced rate. These rates will be raising to 25% and 13% (standard and reduced rates, respectively) but the reduced rate will be gradually raised throughout the next few years. The schedule for the reduced rate is:
- Increase from 10% to 11.14% effective 1 January 2018
- Increase from 11.14% to 12% effective 1 January 2019
- Increase from 12% to 13% effective 1 January 2020
And the schedule for the standard rate:
- Increased from 22% to 25% effective 1 January 2018
- Increased from 25% to 25.4% effective 1 January 2019
- Reduced from 25.4% to 24.9% effective 1 January 2020
- Increased from 24.9% to 25% effective 1 January 2021
Although New Zealand’s tax year doesn’t start until April 1st, they will also be having some tax changes this year. The government has announced a $2 billion per year Family Incomes Package that changes many aspects of the New Zealand Tax Code including changing the tax thresholds and rates. New Zealand’s Financial Minister Steven Joyce says that these changes will benefit 1.3 million families and save them about $26 per week. Here’s a look at how the tax structure will change:
- 5% on the first $14,000 earned (rising to $22,000 from April 1, 2018)
- 5%: $14,001($22,001 from April 1, 2018) to $48,000 ($52,000 from April 1, 2018)
- 30%: $48,001 ($52,001 from April 1, 2018) to $70,000
- 33% from $70,001
The Romanian Government approved the social contributions from companies to employees starting January 1st, 2018. The social contributions for companies dropped from six contributions totalling 22.77% to just one totalling 2.25%. Employee contributions increased from four contributions totalling 32.5% to three contributions totalling 45%. Because of this change of social responsibility from employer to employee, the Romanian gross minimum wage increased from 1,250 RON (EUR 268) in 2017 to 1,450 RON (EUR 311) in 2018.
These are just a few of the tax changes throughout the world for 2018. If you would like to know more about these changes or any other tax issues, feel free to contact us at email@example.com and we will be happy to assist you in these matters