Concerns Over Taxing Severance Packages
July 23, 2025
The government plans to tax severance packages given to employees who leave through voluntary exit plans, raising concerns among labor unions. This regulation is part of a tax reform bill set to take effect in 2026, where taxpayers will only be taxed on amounts exceeding the first €20,000 of severance. Significant backlash is expected from workers in banking and other sectors as these plans aim to improve organizational performance. Unions express concerns that the new tax could limit organizations' ability to reorganize effectively.