The countdown for the upcoming changes to the tax map. The government has announced a series of interventions that will be implemented in the near future and will improve to a significant extent the disposable income of taxpayers.
Finance Minister, Christos Staikouras, even opened «window» for new tax cuts in 2022, if the economy exceeds the 5.9% growth forecast in 2021.
The main changes coming in the near future:
Undeclared square metres: Meanwhile, in the next few hours the gates of the online platform of the KEDE for the declaration of forgotten square metres. Property owners will have a new opportunity, probably the last, until the end of the year, to disclose to the municipalities the undeclared areas of their properties without the retroactive charges (up to 13 years) and the current fines of up to 200%.
Those who proceed with the submission of the declaration of forgotten square meters, must this time pay an additional 20% on the outstanding fees for the period from 1 January 2020 to the day of submission of the declaration.
Abolition of Parental Benefit Tax: From 1 October, the tax on parental transfers and gifts for property up to €800,000 per parent is abolished. For example, for a transfer of an apartment from a father to a daughter, worth 300,000 euros, parental gift tax of 1,000 euros had to be paid. Now this parental gift will be tax-free. Also, for a transfer by parental gift of property with a total value of €600,000, the tax currently amounts to €16,500. From now on the tax will be zero. A gift of 800,000 euros from a parent to a child was currently taxed independently 10%, i.e. 80,000 euros, and from now on the tax will be zero. The measure applies to parental gifts and donations for first-degree relatives i.e. parents, children, husband, wife, father-in-law, mother-in-law.
ENFIA: By the end of November, the exercise for the change in property tax rates will be completed, following the adjustment of the objective values, the addition of new areas to the objective system and the abolition of the supplementary tax. The government's commitment is that most people will pay less tax, while those who escape the additional tax will pay a higher fee for the expensive properties they own. In any case, the fiscal effect will be neutral, meaning that as much as will be collected from ENFIA in 2021 will go into the state coffers in 2022.
Corporate profits: The tax rate is reduced from 24% to 22% for corporate profits.
VAT reduction: The reduced rates are extended to transport, coffee and non-alcoholic drinks, cinemas and the tourist package until June 2022.
Gymnasiums - dance schools: The VAT rate on gyms and dance schools is reduced from 24% to 13% from 1 October 2021 to June 2022.
Electronic transactions: From January 2022 and until 2025, 30% of expenses incurred by taxpayers by electronic means of payment to specific professional sectors and up to the amount of 5,000 euros per year are deductible from the taxable income of individuals. The receipts that will give an extra tax deduction include those relating to plumber, electrician, painter, domestic services, cleaning services, childcare services, services for home help, gymnasiums, dance schools, taxis, legal services. Expenditures for medical, dental and veterinary services will be double counted at the 30% minimum expenditure limit by electronic means of payment.
Incentives for mergers and acquisitions: From 1 October 2021, the tax on capital concentration is reduced by 50%. Sole proprietorships may, through partnerships, create a new legal entity of a higher form to be subject to the tax of legal entities on favourable terms.
For legal entities that merge into a new legal entity or that merge by absorption from an existing legal entity, creating significant economies of scale, a 30% deduction will be granted on the amount of tax due for three years.
VAT on livestock production: The VAT on animal feed for animal production is permanently reduced from 1 October 2021 from 13% to 6%.
