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The new measures come with new taxes

10 November 2012 / 15:11:47  GRReporter
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Taxpayers will be further confused in 2013 in the maze of receipts, after it was decided not to annul the system, but to apply it to the new way of taxation, which is implemented for wage earners and pensioners.

According to the provisions of the new plan, which will be submitted to Parliament no later than the end of November, taxpayers will have to collect receipts corresponding to 25% of their earnings, in order to ensure the basic discount of 1,959 euro under the new scale. This means that those who fail to collect these receipts, will pay a 10% "fine" on the difference of the amount of receipts they have collected and the expected amount which they were required to collect, based on 25% of their incomes.

The cross-party committee creating the new taxation system agreed on the following changes:

* a new tax scale, for workers who are employed under a labour contract and the retired, of 3 factors (from 8 currently existing):

- For incomes of up to 25,000 euro, the tax rate will be 21%;

- For incomes from 25,001 to 47,000 euro, the tax rate will be 36%;

- For incomes of over 47,000 euro, the tax rate will be 45%.

* "A basic" tax cut of 1,950 euro for revenues of up to 18,000 euro, provided that the necessary receipts have been collected. For revenues of 18,001 to 29,000 euro, the above mentioned reduction decreases by 50 euro for each 1,000 euro, and for incomes between 29,001 and 43,000 euro, by 100 euro per 1,000.

This measure is favourable for revenues of up to 25,000 euro, because there are additional burdens above this amount which exceed 1,500 euro.

* Removal of the non-taxable amounts for children. Today these are 2,000 euro for one child, 4,000 euro for two children, 7,000 euro for three children and 10,000 euro for four children. They will be replaced by new family allowances. According to the plan, the new allowances amount to 40 euro a month for the first and second child, 50 euro for the third and fourth child and 60 euro for the fifth and subsequent children. These amounts are given entirely to families with an annual income of up to 10,000 euro, they are reduced by 1/3 for families with incomes of 10,000 to 20,000 euro and they are 2/3 less for families with incomes of up to 30,000 euro.

* Removal of tax exemption for all individuals in cases such as payment of interest on mortgage loans for the first home, rental payment, payment of tuition fees, donations, sponsorships, medical expenses, insurance for renewable energy, payment of support money upon divorce. Until this year, 10% of taxes were reduced for such expenses.

* Removal of the additional tax deductions in income tax for employees on a labour contract in border areas. The 60 euro reduction for each child will be removed for those who have been working in the border areas for at least nine months.

* Reduction of maintenance costs - by 37% for housing and up to 44% for vans, as well as 25% for vessels of open type.

The new plan provides for a further reduction of the minimum additional expenses for the levied from 3,000 to 2,000 euro for singles, and from 5,000 to 3,000 euro for families who submit a mutual tax return.

* Taxation from the first euro of the revenues of freelancers and sole traders under two coefficients - 26% for incomes of up to 50,000 euro and 33% for incomes above 50,000 euro.

For housing, the Ministry of Finance foresees:

* Reduction from 40 to 25 euro per square metre for the first 80 square metres of the main spaces.

* Reduction from 65 to 45 euro per square metre for the next 40 square metres of the main spaces.

* Reduction from 110 to 80 euro per square metre for the next 80 square metres of the main spaces – that is, up to 200 square metres.

* Reduction from 200 to 160 euro per square metre for the next 100 square metres - up to 300 square metres.

* Reduction from 400 to 350 euro per square metre for the next square metres above 300 square metres.

The new tax scale applies for those who:

* Have filed a declaration of a start-up by 31.12.2011, with company headquarters at a private address, and of up to three employers.

* Have filed a declaration to start work for the first time in the year of start-up and in the next two years, and have incomes from a private business or a freelance profession.

In the case of incomes both from wages and property, and from a freelance profession, they will be taxed on the scale of those employed under a labour contract and pensioners for the income from wages, and under the scale of freelancers for the rest of the revenues.

* 33% taxation of the profits of large companies (LLC, etc.) and a repeal of the taxation of dividends.

* Independent taxation at a rate of 13% for incomes of up to 50,000 euro and 16.5% for higher amounts of farmers' incomes.

* Increase of the taxation of wages of officers in the Merchant Marine from 6% to 15%, and of the remuneration of members of the crews of merchant ships from 3% to 10%.

Tags: taxes taxation tax scale freelancers labour contract coefficients
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