Greece to Ease VAT Burden on Small Traders
The #Greek Ministry of Finance is making big changes to the #VAT regime from January 1st, 2015 to ease the bureaucratic burden for some 400,000 small businesses, freelancers and other self employed individuals with low income.
The details are currently being worked out, and the International #Troika finance group will have to approve the new legislation. The whole proposal is being finalized to present for approval to the Vouli (Greek Parliament).
Little revenue will be lost to the Greek state by the planned rationalization say those close to the project. Collection costs will go down and less filing of tax returns will help speed up and simplify the procedures in revenue collection. Accountants should be less pressured as well.
Importantly, the planners have yet to determine the figure under which withholding tax will not have to be calculated. The ball park figure for VAT payment calculation is said to be between 10,000 and 25,000 euros a year.
The Finance Ministry in Athens says that the majority of small traders (52 per cent) contribute less than 4% to the total VAT collected. For the vast majority, collected VAT leads to a tax refund anyway.
Under the streamlined plan there will be no need for small traders to submit an annual VAT statement with effect from January 1, 2014 (backdated) as it has been no more than a summary of submissions throughout the year. Excess payments where VAT is collected will be automatically calculated and refunded quicker and there will be no need to submit claim forms. In addition, companies who suspend their operations or are inactive will not have to pay VAT in advance as is the case now only to be refunded later - as long as they inform the authorities of their status.
There is news on handling marginal balances. It is proposed that at the end of trading periods, if the difference in tax calculation is less than 30 €uros, it will be carried forward to the next reporting period and not refunded as is the case now. Conversely if a trader owes less than €30, it will be carried forward to the trader's benefit.
More favorable rules will apply to farmers and their submission procedures. Refinements in reporting will be made also for newsagents and a dozen other trade sectors of the economy.
It seems that real simplification in tax collection is taking place. As always in Greece, we have to await details of the final version of the Ministry of Finance's small business VAT law to deflect concern that the devil is in the detail. VAT in Greece currently is generally 23% across the board for all goods and services with fresh produce in all its forms set at 13%, with certain exceptions.
Source: efimerida.gr website (in Greek)
The details are currently being worked out, and the International #Troika finance group will have to approve the new legislation. The whole proposal is being finalized to present for approval to the Vouli (Greek Parliament).
Little revenue will be lost to the Greek state by the planned rationalization say those close to the project. Collection costs will go down and less filing of tax returns will help speed up and simplify the procedures in revenue collection. Accountants should be less pressured as well.
Importantly, the planners have yet to determine the figure under which withholding tax will not have to be calculated. The ball park figure for VAT payment calculation is said to be between 10,000 and 25,000 euros a year.
The Finance Ministry in Athens says that the majority of small traders (52 per cent) contribute less than 4% to the total VAT collected. For the vast majority, collected VAT leads to a tax refund anyway.
Under the streamlined plan there will be no need for small traders to submit an annual VAT statement with effect from January 1, 2014 (backdated) as it has been no more than a summary of submissions throughout the year. Excess payments where VAT is collected will be automatically calculated and refunded quicker and there will be no need to submit claim forms. In addition, companies who suspend their operations or are inactive will not have to pay VAT in advance as is the case now only to be refunded later - as long as they inform the authorities of their status.
There is news on handling marginal balances. It is proposed that at the end of trading periods, if the difference in tax calculation is less than 30 €uros, it will be carried forward to the next reporting period and not refunded as is the case now. Conversely if a trader owes less than €30, it will be carried forward to the trader's benefit.
More favorable rules will apply to farmers and their submission procedures. Refinements in reporting will be made also for newsagents and a dozen other trade sectors of the economy.
It seems that real simplification in tax collection is taking place. As always in Greece, we have to await details of the final version of the Ministry of Finance's small business VAT law to deflect concern that the devil is in the detail. VAT in Greece currently is generally 23% across the board for all goods and services with fresh produce in all its forms set at 13%, with certain exceptions.
Source: efimerida.gr website (in Greek)