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Inverid

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. The dual income tax system levies a proportional tax rate on all net income (capital, wage and pension income minus deductions) combined with progressive tax rates on gross labour and pension income. This implies that labour income is taxed at higher rates than capital income, and that the value of the tax allowances is independent of the income level. The dual income tax system deliberately moves away from the comprehensive income tax (global income tax) system which taxes all or most (cash) income minus deductions (net income) according to the same rate schedule. The dual income tax was first implemented in the four Nordic countries (Denmark, Finland, Norway and Sweden) through a number of tax reforms from 1987 to 1993. The dual income tax is therefore also known as the Nordic tax system or the Nordic Dual Income Tax.

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