Last updated on 14 February 2024
What are the tax implications of a partnership (PACS)?
The fiscal impact of a life partnership (PACS) varies for tax purposes. Initially, partnered couples retain 'single' tax status (tax class 1 or 1a) on their monthly salaries, not transitioning to the more advantageous 'married' tax class 2.
As a result, there's no immediate change in monthly salary taxes upon entering a life partnership. However, by jointly filing taxes, partnered couples can access benefits similar to tax class 2, similar to a married couple.
Benefits of joint tax filing for PACS partners include:
Benefits of joint tax filing for PACS partners include:
- Qualification for tax class 2, reducing the overall tax rate on their combined income.
- Doubling the maximum deductible amount for specific expenses (e.g., insurances, personal loan interest).
- Potential eligibility for a professional tax allowance termed 'abatement extra-professional' for both partners engaged in professional activities.