VAT: The 13% rate is set to become permanent for tourism, transportation, cafes, movie theaters, and theaters

The Making the reduced VAT rate permanent 13% tourist packages, transportation, coffee, non-alcoholic beverages, movie theaters, and theaters—which are valid through the end of September, with the exception of the tourism package, which expires at the end of the year—are being reviewed by the economic team.

Utilizing Fiscal Leeway

Finance Minister Christos Staikouras, speaking before the plenary session of Parliament and responding to SYRIZA MP Euclid Tsakalotos, stressed that, in addition to the permanent abolition of the solidarity levy The government aims to take advantage of the fiscal leeway that will become available, to make the reduction in these specific VAT rates permanent.

It should be noted that the reduced VAT rate on coffee, beverages (tea, hot chocolate, etc.), and non-alcoholic drinks served by food service establishments, transportation tickets, and theater and movie theater tickets under the current system will remain in effect until September 30, 2021, while the discount for the travel package remains in effect through the end of the year.

What is the government aiming for?

By making the reduced VAT rate of 13% on services and goods permanent, the government aims to support those sectors of the Greek economy that have been severely impacted by the spread of the, while They are also threatened by the spread of the Delta variant.

Maintaining the «temporary» VAT reduction is expected to result in a lifeline for hundreds of thousands of businesses in these sectors which have been hit hard by the health crisis and will help them get back on their feet as they return to normalcy—a process that is proving to be extremely difficult.

Which tickets are getting cheaper?

They will be sold Cheaper tickets at movie theaters and theaters, while the reduced VAT rate will apply to tickets for train, metro, and tram service, as well as for city and intercity buses, airline tickets, passenger ferry tickets, and combined road, air, and sea transportation.

According to reports, the proposal by the economic team will be high on the agenda of discussions with the institutions, as it is the government's intention, provided that fiscal constraints allow, to reduction in indirect taxation.

Greek tourism is more competitive

Maintaining the low VAT rate is estimated to It will be a significant advantage, especially for Greek tourism businesses, since they will be able to claim a larger share of the global tourism market, as the reduction in VAT on package tours will make Greek tourism products more competitive in international markets, given that in the other Mediterranean countries, VAT ranges between 9% and 10%.

Today, in the tourism sector, specifically in the bed-and-breakfast segment The flat rate is subject to the reduced VAT rate. For half-board accommodations (breakfast and lunch), the flat rate is also subject to the reduced VAT rate. For full-board accommodations (i.e., breakfast, lunch, and dinner) the 5% portion of the flat rate is subject to the standard VAT rate of 24% as consideration paid for the provision of beverages containing alcohol in any proportion, and the 95% is subject to the reduced rate.

In all-inclusive accommodations The 10% flat rate is subject to the standard VAT rate of 24% as a composite service that cannot be clearly identified, and the remaining percentage, 90%, is subject to 13%.