The thresholds for all five personal income tax brackets have been increased, effectively subjecting a higher share of income to lower tax rates.

In the second and third tax brackets, which cover mostly the middle class, the tax rate will drop by a percentage point to 26% and 33% respectively.

Those on the minimum wage will see their earnings rise only marginally, while those on average pay can expect roughly EUR 150 more per year.

The threshold for the highest income bracket, which comes with a 50% tax rate, has been slightly raised to EUR 72,000; there are only about 3,900 individuals who fall into this tax bracket, or 0.3% of all income-tax payers.

The income tax changes are coupled with higher capital gains tax, which will rise to 27.5% from 25%. This rate will also apply to rental income.

Additionally, companies will be subject to a minimum corporate income tax rate of 7%, as tax credits for investments and losses from previous years will be reduced.