![]() ![]() The 15% is to be paid on the gross rental income.ģ. ![]() The 15% flat rate is final and no set-off or refund shall apply. Is the 15% flat rate a final tax, and on which amount is it paid? The 15% tax on rental income applies both to residential (as from 1st January 2014) and commercial property (as from 1st January 2016), but excludes rent from related parties.Ģ. The analysis in most cases show that: the General Negative Income Tax strictly dominates the other rules, including the current ones the Unconditional Basic Income policy is better than the Conditional Basic Income policy Conditional Basic Income policy may lead to a significant reduction in labour supply and poverty-trap effects In-Work-Benefit policy is strictly dominated by the General Negative Income Tax and by the Unconditional Basic Income.1. To qualify for the 15% tax rate on rental income, does the property have to be rented for residential or commercial purposes? The tax-transfer rules considered as candidates are members of a class that includes as special cases various versions of the Negative Income Tax: Conditional (means-tested) Basic Income, Unconditional Basic Income, In-Work Benefits and General Negative Income Tax, combined with a Flat Tax above the exemption level. The optimality criterion is the class of Kolm’s social welfare function. A procedure that simulates the households’ choices under given tax-transfer rules is then embedded in a constrained optimization program in order to identify optimal rules under the public budget constraint. For each country, we estimate a microeconometric model of labour supply for both couples and singles. We present an exercise in empirical optimal taxation for a sample of European countries from three areas: Southern, Central and Northern Europe.
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