In a press conference Tuesday, Finance Minister Kostis Hatzidakis detailed several changes the New Democracy government will bring in a coming tax bill.
“Today we will present to you four important changes that modernize tax legislation and affect in one way or another all or at least large categories of taxpayers,” said Hatzidakis. “These changes will be part of a more comprehensive tax bill. A bill from the Ministry of Economy and Finance, which will include the initiatives that we have already announced, and that the Prime Minister has announced at the Thessaloniki International Fair.”
The four proposed changes are as follows:
A Tax-Free Tip Buffer
The first involves changes to tipping regulations, where the government would create a tax-free allowance on tips of up to 300 euros per month for servers who work in cafés, bars, and restaurants. There is legislation on the books in Greece under which tipping has been considered income and taxable, but in practice tips paid with cash were usually not accounted for in tax declarations. The rise in electronic transactions, and the linking of cash registers to points of sale (POS) systems, has changed that. Hatzidakis stated the tax bill will include fines for employers who attempt to reduce their employees’ wages while replacing them with tips. In such cases, the employer will be required to pay a contribution equal to 22% of the wage reduction.
Lowering taxes for the Self-Employed
The second change concerns the abolition of the self-employed business tax for all legal persons, including for self-employed individuals using invoice books (blokaki) (which allows one to deliver invoices for services rendered). Hatzidakis clarified that this change will be presented in detail soon, but emphasized it is intended as a tax relief for freelancers and independent contractors.
Tax Declaration Date Changes
The third reform regards the submission of tax returns. From now on, Hatzidakis stated tax returns will have fixed submission dates between March 15 and July 15, with no extensions permitted. Additionally, a new graduated deduction system is being introduced, where individuals who submit early and pay their taxes in a lump sum will receive discounts of up to 4%. This is designed to encourage early submissions and reduce use of the the installment payment system. Organizations and institutions that issue late or inaccurate salary statements that could delay the submission of individual tax returns will be enforced with fines of up to 2,500 euros.
Restructuring of the AADE
Lastly, Hatzidakis announced reforms to the administrative model of the Independent Authority for Public Revenue (AADE), aimed at making the agency more efficient. The restructuring will introduce three Deputy Governor positions, redistribute responsibilities between the governor and the board of directors, and allow for the hiring of general managers and directors from the private sector.
