Troika’s Vision For Taxing Greeks: Up to 45% for Employees & Pensioners, Up to 35% for Self-Employed

Greeks will be called to pay one billion euro more on taxes with the new taxation system according to new taxation draft prepared by the Troika. Self-employed will pay taxes from the very first euro of revenues, while one million low-pensioners and employees will be exempted from tax (annual income apparently 9,000 euro).

The most crazy taxation scheme wants employees with over 48,000 euro income paying 45% taxes, while self-employed with pay 35% for income of over 50,000 euro.

Taxes: Employees and Pensioners

three income tax rate categories:

Up to 9,000 euro: no tax

9,001-25,000 euro: tax rate 21%*

25,001-48,000 euro: tax rate 36%

Over 48,001 euro: tax rate 45%.

*KTG understands there must be another category for incomes 9,0001-18,000 euro, otherwise it’s crazy to ask people with 10,000 income to pay 21% tax!

Taxpayers will see many of tax-free deductions to disappear as they will be scrapped. Only 10% tax deduction for medical expenses and alimony will remain.

Lucky are expected to be those with annual income less than 9,000 euro, as they will most likely pay no tax. It looks as the tax-free cap for employees and pensioners to be raised again from 5,000 to 9,000 euro.

Those with the average annual income of a Greek family, i.e. 25,000 euro,  will have to pay much more taxes than today:

Tax Reductions

Up to 18,000 euro income will enjoy tax exemption fo 1,950 euro ( I assume by providing receipts).

18,000-29,000 tax exemption is reduced by 50 euro for every 1,000 euro of income.

29,000-43,000 tax exemption will be 100 euro for every 1,000 euro.

Example: Annual income 30,000 euro paid 5,510 euro tax (after tax exemptions) will pay 5,75o euro.

Taxes: Self-Employed  & Corporate Tax

Income up to 25,000 euro: tax rate 26%

Income more than 50,000 euro : tax rate 35%

For the incomes between 25,001-49,000 apparently the Troika is still seeking for a tax rate:

“The introduction of a new integrated tax regime for the self-employed and professionals with an initial tax rate of 26% rising to 35% after  €50,000 and with no personal tax allowance.”

About the so-called “Tax Reform” the Troika foresees (Page 43/Paragraph: 40)

A simplification of the personal income tax with three rate bands instead of the current eight rates with an enhanced tax credit. Through these reforms, some one million wage and salary earners and pensioners will be taken out of the personal income tax.

The elimination of selective tax credits (on mortgage interest payments, life insurance payments, and student expenses etc.)

The conversion of personal tax allowances for children into means-tested benefits.

The introduction of a new integrated tax regime for the self-employed and professionals with an initial tax rate of 26% rising to 35% after 50,000 and with no personal tax allowance.

A restructured tax regime for corporate profits with a corporate tax rate of 26% and a tax on distributed dividends of 10%, resulting in a gross tax rate on distributed profits of 33.4% (instead of former tax rates of 20% and 25% respectively resulting in a gross tax rate of 40%).

The elimination of special tax regimes based on imputed income, such as those currently in place for farmers and seamen.

Full Troika Draft Report including all austerity measures and state expenditure cuts  here.

Read and Cry 😦


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