The income tax rates and tax credits are as follows.
| 2027 | 2026 | |
|---|---|---|
| Tax band 1 | 36,23% | 35,7% |
| Tax band 2 | 38,16% | 37,56% |
| Tax band 3 | 49,5% | 49,5% |
| Boundary disc 1 | €39,247 | €38,883 |
| Boundary disc 2 | €78,426 | €79,137 |
| General tax credit, maximum | €3,154 | €3,115 |
| Employment tax relief, maximum | €5,929 | €5,712 |
| IACK, maximum | €2,918 | €3,032 |
| Discount for young people with disabilities | €935 | €923 |
| Self-employment deduction | €900 | €1,200 |
| First-time buyer’s allowance | €10 | €2,123 |
| Strike allowance | €908 | €3,630 |
| SME profit exemption | 12,7% | 12,7% |
* For people born before 1 January 1946, a higher upper limit of €41,637 applies to tax bracket 1.
Freedom contribution
The statutory inflation adjustment is carried out annually by applying the so-called table adjustment factor. The Government proposes that citizens and (to a limited extent) businesses contribute to fiscal autonomy by limiting the application of the statutory inflation adjustment. The table adjustment factor will be applied on a limited basis to income tax and payroll tax for 2027 and 2028. Normally, the inflation adjustment would amount to 2.6% (factor 1.026) in 2027, but now only 48% will be applied (factor 1.01248). As a result, tax bands, tax credits and certain other amounts will rise by a smaller margin.