New Tax Laws Aim to Raise More Revenue
Law No. 4110Greece: New Tax Laws Aim to Raise More Revenue
Individual Taxation: Rates, Thresholds, Credits, and Deductions
Employees and Pensioners (valid for income earned as of 1 January 2013)
A progressive tax scale is applicable to both Greek and non-Greek tax residents, with no tax-free bracket. Additionally, the new rules have reduced the existing eight tax brackets to three.
• For income up to EUR 25,000, the applicable tax rate is 22 percent.
• For income from EUR 25,001 up to EUR 42,000, the applicable tax rate is 32 percent.
• For income exceeding EUR 42,001, the applicable tax rate is 42 percent.
[EUR 1 = USD 1.30; EUR 1 = GBP 0.862; EUR 1 = AUD 1.278]
(The prior top rate was 45 percent for incomes over EUR 100,000.)
A tax credit of EUR 2,100 is introduced. This is given in full to employees and pensioners with annual incomes up to EUR 21,000. For annual income between EUR 21,000 and EUR 41,500, the tax credit of a maximum EUR 2,100 is reduced by EUR 100 for every additional EUR 1, 000 of income over EUR 21,000 up to EUR 41,500.
For annual income exceeding EUR 41,500, no tax credit is allowed.
The majority of deductions are abolished (i.e., house rental expenses, tuition fees, loan interest, life insurance premiums, etc.) and special conditions are imposed on the remaining deductions (medical and hospital expenses, alimony, donations).
Non-Greek tax residents are not eligible for any credits or deductions except for European Union (EU) citizens earning more than 90 percent of their worldwide income in Greece.