Threshold

1.

A level, rate or amount at which something comes into effect.

For example, if a non-financial counterparty exceeds a threshold of EUR 1 billion in credit derivative contracts, this will trigger mandatory clearing in all asset classes under EMIR.

2. Taxation.

In taxation, a money level where a tax comes into effect, or at which a rate of tax changes.

Tax rates are often higher, on higher levels of income.

See also

• Clearing
• Counterparty
• Derivative instrument
• EMIR
• Fiscal drag
• Laffer curve
• Materiality
• Progressive
• Tax
• Threshold balancing
• Tipping point