30 Jun KPC Finance: All the information about the new tax bill
KPC Finance: All The Information About The New Tax Bill
We present you the new tax bill which includes, among others,tax reliefs for individuals and businesses as well as several other development measures to stimulate the Greek economy and construction. At the same time, the tax bill provides significant incentives to attract foreign direct investment and capital that will make Greece an attractive investment destination.
A. For individuals and legal entities, the main tax reliefs include:
In addition, the income tax reduction is adjusted based on the number of children, and reduced VAT rates are applied to support vulnerable groups, as well as for reasons of social protection.
Β. Significant incentives to attract foreign direct investments and capital. Particularly:
- Aiming in attracting investments, tax legislation is being clarified and simplified concerning the tax domicile,while an alternative way of taxing foreign-origin income is introduced by paying an annual flat tax of more than EUR 500.000
- The tax rate on dividends is reduced from 10% to 5% and furthermore, is introduced the conditional exemption of legal persons who are tax residents of Greece from the capital gains transfer tax.
- Exemption from income tax and solidarity levy on corporate bonds listed on a regulated market.
C. Measures are being introduced to restart the economy in important sectors contributing to the country’s GDP. Particularly:
- VAT is suspended on buildings licensed from 1-1-2006 onwards, while the suspension of VAT also applies to the contractual consideration
- The levy of goodwill tax on the transfer of real estate is suspended for three years
Incentives are introduced to incur the costs of obtaining services related to the energy, functional and aesthetic upgrading of buildings, by granting a 40% tax deduction for the costs of the related work, with a total expenditure of € 16.000, divided equally for a 4 year period
- Increase of the maximum number of installments of fixed debt settlement from 12 to 24 and in special cases of emergency debts from 24 to 48. Integration of own debts is provided for the same debtor for the second time if the arrangement is lost for any reasons relevant to his liability.
- The leasing of public fisheries waters to fishing cooperatives is reduced from 10% to 5% on the value of the catches
D. Tax measures are introduced to promote sustainable development, such as:
- Introduction of a package of measures to promote the use of public transport and zero-emission vehicles, following the best practices of other Member States. In particular, the supply of a vehicle with a low or zero emission vehicle is not considered to be an in-kind benefit. In addition, the company is given a 30% discount over the leasing of a zero or low emissions car, while for the buying cost the company is given the discount of 30% of the above expense
- Reinforcement of the corporate social responsibility and employee benefits by:
- a deduction from the gross income for expenses relating to Corporate Social Responsibility actions, unlimited travel cards for public transportation without them being considered as income for the employee
- enhancement of the in-kind and cash donation by institutions to the State, through the deduction of income from expenditures in cash or in-kind donations to the Greek State and the local authorities
Ε. Introduction of measures for the expansion of electronic transactions. Particularly:
- Employees, retirees, and freelancers should spend the 30% of their actual income on electronic payment instruments.Furthermore, it should be noted that in addition to the above:
- In the calculation of the actual income, the amount of the solidarity levy and the amount of maintenance for a divorced spouse or child are not included
- In the case of expenses incurred regarding the payment of individual income tax and Unified Property Tax, loan liabilities to financial institutions and rents exceeding the 60% of the actual income, the required rate of expenditure is limited from thirty percent (30%) to twenty percent (20%) of their actual income.
- For the taxpayer whose account has been seized, the expenditure limit shall be limited to five thousand euros (€ 5.000).
Exemptions are provided for taxpayers who have objective difficulties in using electronic payment instruments.
F. Reduction of the bureaucratic burden on the Tax Administration and Businesses
- Debt write-off for individuals and legal entities up to € 10 per taxpayer. In this way, the Tax Administration is relieved of the bureaucratic costs of tracking these debts, while over 500,000 taxpayers will again be able to issue tax information, with every positive effect on their financial activity.
- Periodic write-offs of small amounts are applied for up to € 1 per taxpayer, in order to discharge the operation of the Tax Administration.
- Businesses are able to write-off amounts of debt from their clients, for amounts up to € 300 per debtor, without being obliged to previously practice all the legal procedures for their recovery, since in most cases the cost of this procedure is higher from the amount of the debt.