Tax rates re­worked for bailout

Higher tax­a­tion fore­seen for farm­ers, rental in­comes, heat­ing oil as part of new in­ter­na­tional agree­ment

Kathimerini English - - Front Page -

The new tax bill that forms part of Greece’s third bailout is due to be an­nounced by the Min­istry of Fi­nance in Oc­to­ber. The new mea­sures, which Deputy Fi­nance Min­is­ter Try­fon Alex­i­adis is charged with in­tro­duc­ing, an­tic­i­pate among oth­ers higher tax rates for in­come from prop­erty rental as well as an in­crease in farm­ers’ tax rates. Un­til now, farm­ers have en­joyed a par­tic­u­larly priv­i­leged tax sta­tus com­pared to other pro­fes­sions, in sev­eral cases avoid­ing tax al­to­gether due to ex­ist­ing ex­emp­tions.

For farm­ers, the in­come tax rate will in­crease steadily from 13 per­cent to 20 per­cent in 2016 and 26 per­cent in 2017. Tax con­tri­bu­tions by farm­ers have been com­par­a­tively low, par­tic­u­larly in the last few years. For ex­am­ple, a trader with an an­nual in­come of 10,000 eu­ros paid the state 4,030 eu­ros an­nu­ally in in­come tax. For the same amount earned, a farmer would pay 1,657.50 eu­ros in tax an­nu­ally.

Other tax in­creases ap­ply­ing to farm­ers in­clude the spe­cial con­sump­tion tax for trans­port fuel. From Oc­to­ber 1, this rate will rise from its cur­rent 0.066 eu­ros per liter to 0.200 eu­ros/liter. By Oc­to­ber 1, 2016, the rate will be 0.33 eu­ros/liter.

From Oc­to­ber 1, the an­nual tax on prop­erty rental in­come un­der 12,000 eu­ros will in­crease from 11 per­cent to 15 per­cent. For in­comes over 12,000 eu­ros per an­num, the tax will rise from 33 to 35 per­cent. That means a land­lord with a cur­rent an­nual rental in­come of 12,000 eu­ros pay­ing 1,320 eu­ros in tax to the state an­nu­ally will pay 1,800 eu­ros un­der the new rates. The tax paid on an an­nual rental in­come of 20,000 eu­ros will go from 3,960 to 4,600 eu­ros an­nu­ally.

Other mea­sures in­clude the stream­lin­ing of the heat­ing oil al­lowance. The aim is to re­duce the cost of this al­lowance by half in the 2016 bud­get.

680.94

1.1078

The tax scale for in­her­i­tance and parental ben­e­fits is also up for re­design, as well as the re-ex­am­i­na­tion of the pro­vi­sions which gov­ern them.

The ENFIA prop­erty tax will be in­creased in or­der to com­pen­sate for tax short­falls due to re­duced prop­erty val­ues.

Cur­rent le­gal ob­sta­cles will also be lifted to al­low tax author­i­ties to ac­cess taxpayers’ busi­ness premises, in­clud­ing homes de­clared as com­mer­cial prop­erty.

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