Call us on

Taxation In Greece | What We Need To Know.

  Sanjiv Gupta CPA  Published 
Taxation In Greece | What We Need To Know.

Greece is the home of civilization as we know it; at least it is among the few countries in the world that were civilized way earlier than the rest. For a long time, Greece was the poster child for European success, a country that had been able to maintain its impact around the world for quite a long time. However, the recession hit Greece the hardest and it is one of the countries that have been unable to recover fully from the effects of the recession. In fact, the countries within the eurozone have been running all over themselves trying to save the Greek economy from falling into ruins. There have been a number of bailout options that have been put on the table as well as a variety of austerity measures that have been instituted to keep the country in the Eurozone. However, not everyone in the region is happy about the measures that have been taken. With the country witnessing at times violent protests, it is easy to conclude that the government in Greece is under extreme pressure to deliver changes that would not only resonate with locals of the country but also the countries that are actively involved in bailing the country out.

Among these measures that have been put in place include the use of taxation as an austerity measure. It is under this option that new taxation measures have been tabled in the Greek parliament of late. The taxation measures are expected to affect corporate citizens, those that have been employed by the different institutions as well as those who have employed themselves. To start with, this bill raises corporation tax from the normal 6% to a massive 26%. On the other hand, the tax that these companies pay on the distributed dividends has been reduced by 15% from 25% to 10%. The bill also proposes that capital gains received from transactions in the stock exchange be taxed at the rate of 20%. In addition, rental income has been placed under the taxation base at 10% for income below 12,000 Euros and 33% for income above this amount. Farmers can also expect that the tax breaks that they have been receiving will be stopped.

From the outlook of this bill, you can tell that it is expected the financial impact it will have on the local citizen will not be positive. However, the result that is expected from here to the government is positive. Providing the government with the ability to finance some of its expenses and projects, thereby slowly get out of the ditch that it has fallen into. The negative reception that the austerity measures have received over the last year can only show you how much is expected of the Greeks. In November this year, Greek passed its 2013 budget as part of the EUR13.5 billion two-year austerity and the reform package seeks to reduce its deficit from a massive 6.6% of the GDP to 4.2%. The achievement of this target will affect public sector wages, pensions and welfare benefits as well as spending on defense, the health sector, and education.