Government approves 2026 IRS tax rate reduction following parliamentary authorization

The government approved a decree-law reducing the income tax (IRS) rates for the first six tax brackets, with retroactive effect to 1 January 2026. To compensate for the year-to-date difference, income tax withholdings on salaries and pensions paid in November 2026 will be halved (50% reduction). This relief does not apply to very high incomes (over 20,000 euros monthly for employees or 18,000 euros for pensioners). Normal withholding tables will resume in December 2026.