Jérôme has been a teacher for many years. A few days ago, while looking at his tax return, he discovered that he had to pay a fairly high amount to the tax authorities. A great first for this professor who is rather used to touching up a little money. “My situation has been stable for years. I own my home, I have a second house to protect my children from want, and my salary has been roughly the same for quite a while. […] I was very surprised to learn that I had to pay again, where I usually touch up. And that’s not nothing, we’re talking about a gap of 2,000 euros compared to 2023!”
How to explain such a differential? For several years, Jérôme has been helped by the FPS Finances to complete his declaration. “At the start, I had a somewhat hybrid status and I got help. From now on, I am called every year by the administration. So I asked the question, specifying that I did not understand this discrepancy. The person I spoke to online told me that it was normal: I had been indexed, and I was therefore moving into the higher tax scale.” A disappointment which tends to annoy the teacher: “Politicians say they want to act for low and middle wages. We had this salary indexation, and it was very good. But ultimately, it’s quite vicious. Because the State takes back from us – and not just a little – what we have obtained. Personally, I did not ask to be indexed. And when I see what I have to pay again, I tell myself that I would have preferred not to benefit from this salary increase. We are still talking about 2000 euros less.”
Indexed taxation, but not in the same way
This situation does not really surprise Aurélien Bortolotti, tax lawyer in Liège. “This is indeed the dramatic consequence of the various salary indexations which took place after Covid,” he emphasizes. These automatic indexations, supposed to compensate for the increase in the cost of living, also have their deleterious effects. “If everyone, apart from employers, thought it was great to be indexed, we have the other side of the coin today.”
In Belgium, if salaries are indexed, tax scales are also. This means, very concretely, that the income brackets which are subject to 25, 40, 45 and 50% tax are also changing. A priori, this is rather good news for the taxpayer: if your income changes, the ceilings for each tax bracket follow. You therefore do not move so easily into a higher (more taxed) bracket, and that is so much the better. Aurélien Bortolotti, however, brings some nuances: “The problem is that we have indexed salaries so much that the evolution of scaled tax brackets has not followed!” They have therefore not increased in the same way as wages.
The lawyer also notes that this incomplete indexation is not specific to salaries. “Another example with the property tax: if you are an owner, the basis for calculating the property tax is the indexed cadastral income to which we add the percentage that falls to each authority. But you are entitled to reductions, in particular 125 euros per dependent child. Except that this amount of 125 euros has not changed since 2010.”
Jérôme’s case is undoubtedly not isolated, other people will certainly learn that they have moved to the higher tax bracket, when completing their tax return. “I was talking about it with an acquaintance who works in the Walloon Region, and who also has a differential of 2,500 euros. Whereas, like me, his personal situation has absolutely not changed. It is not logical !” the teacher fumes.
On this subject, Aurélien Bortolotti cannot resist the urge to send a little message to politicians: “A few days before the elections, it would perhaps be good to remind them that it would be interesting for indexation to be done in both directions, by reviewing the tax brackets as well.”
