Taxation and Tax Evasion
The Greek tax system is a tiered one, as Greece employs the system of progressive taxation. Greek law recognizes six categories of taxable income: immovable property, movable property (investment), income from agriculture, business, employment, and income from professional activities. Greece's personal income tax rate up until recently ranged from 0% for annual incomes below €12,000 and 45% for annual incomes over €100,000. Under the new 2010 tax reform, tax exemptions have been abolished.
Also under the new austerity measures and among other changes, the personal income tax-free ceiling has been reduced to €5,000 per annum while further future changes, for example abolition of this ceiling, are already being planned.
Greece's corporate tax has dropped from 40% in 2000 to 20% in 2010. For 2011 only, corporate tax will be at 24%. Value added tax (VAT) has gone up in 2010 compared to 2009: 23% as opposed to 19%.
The lowest VAT possible is 6.5% (previously 4.5%) for newspapers, periodicals and cultural event tickets, while a tax rate of 13% (from 9%) applies to certain service sector professions. Additionally, both employers and employees have to pay social contribution taxes, which apply at a rate of 16% for white collar jobs and 19.5% for blue collar jobs, and are used for social insurance.
The Ministry of Finance expects tax revenues for 2012 to be €52.7 billion (€23.6 billion in direct taxes and €29.1 billion in indirect taxes), an increase of 5.8% from 2011. In 2012 the government is expected to have considerably higher tax revenues than in 2011 on a number of sectors, primarily housing (an increase of 217.5% from 2011).
Read more about this topic: Economy Of Greece
Famous quotes containing the words taxation and/or tax:
“Every diminution of the public burdens arising from taxation gives to individual enterprise increased power and furnishes to all the members of our happy confederacy new motives for patriotic affection and support.”
—Andrew Jackson (1767–1845)
“People buy their necessities in shops and have to pay dearly for them because they have to assist in paying for what is also on sale there but only rarely finds purchasers: the luxury and amusement goods. So it is that luxury continually imposes a tax on the simple people who have to do without it.”
—Friedrich Nietzsche (1844–1900)