--- title: Tax-free threshold by countries (2026) date: 2024-10-31T08:53:24Z modified: 2026-09-30T12:11:01Z permalink: "https://abill.io/et/blog/tax-free-threshold-by-countries/" type: post status: publish excerpt: Discover how tax-free thresholds across Europe impact your earnings and what it means for freelancers navigating international taxation. wpid: 2734 categories: - Maksud - Vabakutselistele translation_priority: - Optional featured_image: "https://abill.io/app/uploads/2024/10/AdobeStock_101606643-scaled.jpeg" author: Anna Macko --- Updated on September 30, 2026 **_Disclaimer:_** _This summary is for informational purposes only and is not legal or tax advice. Tax rules depend on residency, income type, deductions, family status, and local filing rules. Always check the local tax authority or a qualified tax adviser before relying on these figures._ Navigating tax-free thresholds across Europe is not always straightforward. Some countries have a clear personal allowance or basic exemption. Others rely on a personal tax credit, a minimum subsistence rule, or a 0% band within a progressive tax system. That distinction matters, especially for freelancers. This list may help freelancers understand how and if they need to pay tax in their home country when using Abillio; however, it is for informational purposes only. Freelancers should always consult their [local tax authority](https://taxation-customs.ec.europa.eu/taxation/vat/national-tax-administrations_en) or seek professional advice before taking action. #### **Poland** Poland offers a clear tax-free threshold. Income up to **PLN 30,000 per year** is exempt from personal income tax. Beyond that: Up to PLN 120,000 – 12% tax Above PLN 120,000 – 32% tax #### **UK** The [UK](https://abill.io/en/blog/self-employed-setup-and-freelancer-taxation-in-the-uk/) maintains a standard **Personal Allowance of £12,570**. This is the amount most individuals can earn before paying income tax. The allowance gradually decreases for higher earners. #### **Belgium** Belgium provides a **tax-free allowance**, meaning part of your income is not taxed. For income earned in 2026, this amount is **€11,180 per year** (up from €10,910 for 2025 income). #### **Latvia** Latvia moved from a progressive, income-dependent non-taxable minimum to a **fixed threshold for everyone** as of 2025. In 2026, the non-taxable minimum is **€550 per month (€6,600 per year)**, applied regardless of how much you earn. Important: - Unlike pre-2025 rules, the allowance no longer decreases as your income increases - Employees apply it through their salary tax book (_algas nodokļa grāmatiņa_) with their employer; others can claim it in the annual income declaration #### **Estonia** Estonia updated its system in 2026. The **basic exemption is €700 per month (€8,400 per year)**. Unlike previous years, the declining “tax hump” system has been abolished: the €700 exemption now applies to everyone, regardless of income. People of pension age receive €776 per month (€9,312 per year). #### **France** France does not use a single fixed tax-free threshold. Instead, it applies a **0% tax band** within its progressive system. For 2026, that band covers income up to **€11,600** per share of the household’s quotient familial, a threshold that’s adjusted annually and depends on family composition, not just total income. #### **Iceland** Iceland uses a **personal tax credit system**, rather than a traditional threshold. In 2026, the credit is: - **ISK 72,492 per month** - **ISK 869,898 per year** This credit offsets tax rather than exempting income directly. #### **Austria** Austria applies a clear 0% tax band. Income up to **€13,539 per year** is not subject to income tax (2026, up from €13,308 in 2025, adjusted for inflation). #### **Germany** Germany provides a **basic personal allowance**. In 2026: - **€12,348 per year** is tax-free for a single individual - Double that amount applies to married couples #### **Portugal** Portugal uses progressive tax rates but also applies a **minimum subsistence rule**. In 2026, income up to approximately **€12,880** is effectively protected from taxation through this mechanism. ℹ️ This protection only applies to income tax. Freelancers in Portugal still need to register their activity with Finanças (as a trabalhador independente) before invoicing, and social security contributions apply after the first 12 months of activity. ## Some countries use flat tax rates or special regimes instead of a standard tax-free threshold: #### **Hungary** Hungary applies a flat 15% income tax, but certain regimes include a tax-free portion. Under the flat-rate (_átalányadó_) scheme for sole traders, income up to **HUF 1,936,800** (half the annual minimum wage) is tax-free in 2026. This does not apply universally to all taxpayers. #### **Romania** Romania applies a **flat 10% income tax**. While there is no standard tax-free threshold, additional obligations (such as social contributions) apply once income exceeds certain limits. #### **Spain** Spain does have a tax-free component, although it is not presented as a simple threshold. The **personal allowance starts at €5,550**, representing income considered necessary for basic living expenses. ℹ️ This allowance only affects income tax. It doesn’t exempt you from registering as self-employed (autónomo) with Social Security. See [more here](https://abill.io/en/blog/autonomo-spain/). ## Why these differences matter While it’s tempting to compare countries directly, tax-free income is calculated differently depending on the system: - **Fixed allowances and 0% bands** (UK, Germany, Poland, Belgium, Austria, France) - **Fixed monthly allowances** (Latvia, Estonia) - **Tax credits** (Iceland) - **Deductions and minimum income rules** (Portugal, Spain) ## Final thoughts Understanding how tax-free income works across countries helps you estimate what you’ll actually keep – not just what you earn on paper. But the key thing to remember is this: your tax obligations are determined by your **country of tax residence**, not where your clients are based. If you’re invoicing clients internationally, it’s worth double-checking how your local tax system treats that income to avoid unexpected surprises. If you’re a freelancer looking for a simpler way to invoice clients globally without setting up your own company, Abillio [helps you handle](https://abill.io/en/blog/how-to-get-started-with-abillio/) the admin side of things. You can create compliant, business-ready invoices and manage your income in one place – so you can spend less time on paperwork and more time on your work.