Updated on 14/02/2024

CO2 Tax Credit (CI-CO2)

What is the CI-CO2? The CO2 Tax Credit (CI-CO2) is a recent government initiative that aims to help many of the employees and pensioners in 2024. It is designed to offset the cost of the CO2 tax for those with lower incomes.

What led to the introduction of the CI-CO2? The tripartite agreement from March 2023 introduced several aids for employees and pensioners, including a tax reduction through the conjuncture tax credit and adjustments to the tax scale. A less discussed but upcoming aid is the CO2 tax credit, intended to offset the cost of the CO2 tax for lower salaries as of January 1, 2024.

Who is eligible for the CO2 tax credit and how much is it? According to the law, the CO2 tax credit is 14 € per month for individuals whose annual income does not exceed 40.000 €. This amounts to 168 € per year for employees, pensioners and self-employed persons.

How does the CI-CO2 impact different income levels? — The CI-CO2 is intended for lower incomes, which is reflected in its degressive effect. For example, an employee earning 60.000 € gross per year (5.000 € per month) will receive 7 € per month in CO2 credit. The credit is not granted for gross salaries exceeding 79.999 € per year.

How does the CI-CO2 interact with other factors affecting income? — Although the CI-CO2 is intended to increase purchasing power, it is subject to limitations. It will be affected by the reduction of the employee tax credit at the beginning of 2024 and the increase of the CO2 tax from 30 € to 35 € per ton of carbon on January 1st.

How is the CI-CO2 calculated based on the gross annual salary? The CI-CO2 formula is structured as follows:
  • From 936 € to 40.000€ gross per year, the CI-CO2 tax credit for employees is 168 € per year.
  • From 40.001 € to 79.999 € gross per year, the CI-CO2 tax credit for employees is [168 € - (gross salary - 40.000 €) x 0.0042] per year.
  • The employee tax credit (CIS) and the CI-CO2 tax credit are not available for gross salaries of 80.000 € per year or 6.667 € per month.

What are the eligibility and payment conditions for the CI-CO2? — To be eligible for the CI-CO2 tax credit, individuals must have a tax card with the mention "CIS: OUI". The CI-CO2 tax credit for employees is paid monthly by the employer in accordance with the employee tax credit (CIS) procedure.

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