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Greek Taxation: New Ways to Squeeze Out Small Businesses & Freelancers

A new-new-new, the la  Taxation bill is under way as the Greek Finance Ministry “tries to combat tax evasion and injustice”(apparently).  The self-assessment, in power since 2004, will be abolished and the so-called new “objective criteria” will be applied for the taxation of small businesses and freelancers. These will include not only the real revenues but also, among others, the amount of employees, the size of real estate, the mobile phone bills amounts and the tangible assets, i.e. the bank savings. If the tax office realized the taxpayers’ savings can not be confirmed with the tax declaration, the taxpayers will be asked to pay more tax. As of 2012 one million Greek owners of small businesses and freelancers will be kindly requested to pay more in taxes. What if the government continuously repeats that there would be no more taxes. The real life dismisses these claims. For the x-time, since Greece’s turned to international lenders for financial aid. The new criteria are expected to give the final shot to thousands of small businesses, self-employees and freelancers who desperately try to survive in an economic environment of deepest recession.  

Greek FinMin To Abolish Tax Self-Assessment Regulation

The Greek Finance Ministry prepares a new bill for the National Tax System with the ambition of a new beginning in fighting tax evasion and injustice. In this context, a series of regulations that flared up tax evasion regularly are under revision, with the ultimate aim of elimination. 

Thus, the self-assessment of small businesses and freelancers are to be abolished by 2012, while the objective criteria for minimum income will be restored.  

The regulation of self-assessment established in 2004 and referred to businesses with annual gross income up to €300,000 and freelancers with income of €150,000.

The arrangement provided that if a business or a freelancer declared income above the ceiling, then their tax book would close without a tax audit.

This regulation caused loss of considerable state revenue as there were many taxpayers who closed tax book, but their income was much high than declared. (Capital.gr )

The new objective criteria

“The new objective criteria will not be so new, and will be largely  similar to those applied in the mid 90’s. They managed to increase the state revenues, however they triggered a storm of reactions and were removed after three years of implementation. The objective criteria to be restored include factors such as the location of the company’s geographic base (the tax office will calculate a different income for a doctor with offices in Athens noble-suburb Kolonaki than in middle-class Peristeri), the surface of professional office, the mobile phone amounts, the number of employees, the size of real estate, the tangible assets of the taxpayer etc.

All this along with other factors will be components of an algorithm by which  the minimum income a freelancer will be calculated. The taxpayer will be taxed at the highest income after the comparison of the “objective criteria” and the declared income to tax office.”

The objective criteria is an amazing taxation measure that shows people are richer than they thought, they were. My 84-year-old father, for example, got “richer” by 5,000 euro this year, as the tax office calculated that he needs 5,000 euro to maintain his flat. The disabled man needs to pay taxes even though his real income -pension- has suffered a generous …”haircut”!

And by the way: I will hardly see any much-needed investors around, if the taxation system changes every six months.

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3 comments

  1. And again they are changing the whole f…… tax-hording! Half of us will go bust and the other half just crazy.
    And why are they changing? According to Capital.gr this is the problem:

    The arrangement provided that if a business or a freelancer declared income above the ceiling, then their tax book would close without a tax audit … there were many taxpayers who closed tax book, but their income was much high than declared.

    So because the whole tax-collection mechanism is rotten to the core, they will change the rules again and keep the rotten mechanism in place. So nothing will change. Just those who don’t cheat will face even higher taxation and more corruption.
    I have to say, reading this and headlines like “Papademos concerned about government unity, Fyrom” and “Rifts in Pasok grow wider”, I had enough. More than enough. It doesn’t matter how hard one is working, how hard one tries to declare everything orderly, we are driven to bankruptcy. And when I read the example of your father… It just makes me so angry.
    Do you know that of all the expenses we have as a business we can just declare about a THIRD?!!! How crazy is that?!
    Last time I was at the tax-office my wife had to send me away, because I was ready to murder the guy in front of me. That was about 2 years ago. 😆

    • stay away from tax offices – let your accountant councelor do this job for you.

      • Had a taxnumber in Greece since 2003. Each year I try to declare, all though I dont earn money here. But as fare as I can find out, according to the law, even though you dont earn money, having a taxnumber, you have to declare.. Every year, Im told one thing at the taxoffice, then go to an accountant (tried several) who just say its not needed.. And im sure, one day im gonna end up with a fine!.. Argh..

        Now I need to go and change the adresse on the papers.. Thats gonna be fun!! Not.. But have to, because I bought a new bike..