Out of control: Greece to tax annual income of €26,000 with 45%!

Posted by in Economy

 The new taxation system the Greek finance ministry is preparing  under the Troika dictations, is getting more and more out of control with the technocrats apparently having lost any sense for social justice. According to the latest version given to the press, annual incomes of more than 26,000 euro will be taxed with 45 percent, while the tax-free amount – currently at 5,000 euro – will be scrapped. And thus not only for self-employed but also for employees and pensioners.

The latest suggestion prepared by the Finance Ministry foresees:

New three tax scale for employees and pensioners:

* tax rate 21% from the first euro up to € 18,000  (original plan up to € 25,000)

* tax rate 26% for incomes 18,000 to 26,000 euro ( according to some other sources: tax rate 36%; original plan was 36% for 25,001 to 48,000 euro)

* tax rate 45% for incomes of 26,001 euro (original plan for over € 45,000)

The tax-free amount of € 5,000 will be scrapped and be replaced by a tax-decrease of  € 1,950 for all taxpayers regardless of income level and marital status.

The new law also sees a shift in taxation for the self-employed, as they will get taxed from the first euro of their net income with a 26 percent rate up to 50,000 euros per year and with a 33 percent rate for any income that exceeds 50,000 euros. Small enterprises will be taxed by the same rates, but their tax deposit will increase from 55 percent to 80 percent.

Rental revenues will be taxed with a 10 percent rate up to 12,000 euros per year and with a 33 percent rate for any revenues in excess of 12,000 euros.

Examples

 Employee, 3 children annual income 17,500 euro (1,250 e/m): before 995 income tax – after 1,725 euro

Self-employed annual income 16,000 euro: before 820 euro – after 3,360 euro

Lawyer, annual income  600,000 euro: before 257,420 euro – after 194,500 euro

The draft has to be finalized until upcoming Wednesday. Major issue of dispute among coalition government partners is the scrapping of tax-free amounts for children. (several sources/Greek media)

PS What do they drink?