• Greek Taxes 2008

    by  • 16 January, 2008 • General • 1 Comment

    Ils sont fous, ces Romains!For the year 2008 the Greek government has implemented phases 2 and 3 of the planned tax reform program that the conservative ND (Nea Demokratia) party has initiated when they came to power in 2004. You might think of Greece as a poor country. You’d be wrong. As a matter of fact, Greece is a reasonably wealthy country, that is, its inhabitants are reasonably wealthy, but the government so far couldn’t lay their hands on a share of this wealth. The reasons? Try bureaucratic inefficiency, corruption, incompetence. They’re trying to get a grip on that. It will be a tough battle.

    I thought you might be interested in comparing your own system with ours, so I’m going to give you a rundown of the most important points in the new regulation, the basics, as far as I understand them. I’m pretty sure that what follows is not complete, with my limited command of Greek it is near to impossible to decipher all of the peculiarities of these regulations (because I don’t posses a knowledge of the sometimes twisted intricacies of Greek laws and regulations, past and present).

    > ###Budget
    > First of all, according to the new budget, in 2008 we will be paying an additional 6,24 billion euro, of which 3,97 billion euro in indirect taxes and the remaining 2,27 billion euro in direct taxation.

    > ###Income Tax
    > * tax free income threshold for employees is set at 12.000€, from 11.000€ in the previous year
    > * tax free income threshold for non-employed natural persons* is set at 10.500€, from 9.500€ in the previous year
    > * the previous bracket from 11.000€ to 13.000€ disappears (was taxed at 15%)
    > * the portion of income between 12.000€ and 23.000€ will be taxed at 27% (from 29% in 2007)
    > * the previous bracket from 23.000€ to 30.000€ will also be taxed at 27% (from 40% in 2007)
    > * the portion of income between 30.000€ and 75.000€ is taxed at 37% (down from 39% in 2007)
    > * income above 75.000€ will be taxed at 40% as previously.

    *I have to check with an accountant what is meant by “non-employed”. This could mean “unemployed”, but also “self-employed”. It is significant and telling however that this distinction is made by the Greek state: it seems to imply that if your not-employed you’ll cheat the system so we are going to take an advance on that.

    > ###Tax Credits and deductions
    > – cost of rent and school fees credits increase from 220€ to 240€
    > – cost of life insurance credits increase from 1.100€ to 1.200€
    > – cost of natural gas installation credits increase from 500€ to 700€
    > – can be deducted to the tune of 40% the costs — made in the period August-December 2007 — of:
    > – amusement parks, restaurants, pizzerias, snack bars, tavernas, ouzeris (in short every where you can eat)
    > – conservatories, dance and martial arts schools, gymnasiums, swimming pools, weight loss and beauty care centers, hair salons, dietitians, nutritionists, homeopathy, logo-therapists and massage parlors.
    > – repair and maintenance or air conditioning systems
    > – plumbing, electrical work, painting and other professionals involved in the repair and maintenance of buildings, such as carpenters, tilers, glazers and metal work.
    > – the total amount of deductions should not exceed 8.000€.

    Notice the disparity between educational costs and the costs of “personal care”…

    > ###Property Tax
    > – annual property tax: a flat fee of 0.1% for properties of individuals, 0.6% for properties of legal entities when not for their own use, and 0.1% for properties used in commercial or production activities of companies, non-profit legal entities, companies investing in property and real estate funds, and — get this — the State and the Church. The Greek state uses the notion of “objective value” as a basis for taxation, which is an assessment by the State of the value of the property. This objective value used to be much lower than the market price, usually at 2/3 or lower of the latter. However, a re-evaluation of the objective value is planned for the spring, expecting it to raise on average by 20%. A minimum objective value of 1000€ per square meter will be applied to any property within the boundaries of a community with 1000 residents or more.
    > – the first property, if inhabited by its owner, up to a maximum floor plan of 200 square meters, or a value of 300,000€ is exempt from taxation. The excess surface or value if any will be taxed proportionally. The exemption is granted to the property with the highest objective value in case a person possesses multiple properties.
    > – drastically reduced inheritance tax for relatives of the first and second degree with a one-off fee of 1%

    For the first time Greeks will be asked to pay property taxes if they own more than one property, like a house in town and one in their native village (their traditional retreat) or at the coast. Most but not all of the Greeks we know are in that position.

    > ###Other taxes
    > – financial profits derived from sales of shares in domestic or foreign stock markets and profits from trading in derivatives are taxed at 25%
    > – profits derived from trading derivatives in foreign markets: 15%
    > – a special consumption tax on unleaded petrol of 5,7%, on super petrol of 3,3%

    There you have it. As good as I could gather it. All in all it seems that the Greek state is getting an additional 600€ per capita in income.

    One Response to Greek Taxes 2008

    1. Theodore
      16 January, 2008 at 19:25

      Bravo Luc, you get the idea better than me!
      I will ask you to assist me at my book keeping!

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