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100% deductible expenses, only half in personal income tax?

AO
2022-11-01

Question

Dear

Is it correct that an expense that is 100% deductible is only deducted for half of the personal income tax?

I think this has already been discussed here, not 100% sure 8-)

But personal income tax is your tax and therefore counts (roughly speaking) as 50%. So it makes sense that if you enter an expense that is 100% deductible, the impact on your personal income tax is only 50%.

  1. Let's say you had a profit of 100 euro and had to pay 50 euro (50% taxes) in personal income tax on that.

  2. You enter an expense of 20 euros that is 100% deductible.

  3. Your profit drops to 80 euros and you only have to pay 40 euros in personal income tax on that.

So it seems correct to me 8-)</

It has indeed happened before, the impact on your personal income tax is what you "save" in taxes.

Thank you!

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