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The Tax Bills of Horror – 5,5 Million Greek Taxpayers Must Find and Pay 5.1 Billion Euro

Friday night and six friends sit at a grill at a nice Athens square enjoying a cheap souvlaki meal and ice-cold beers. We chat about this and that and possible vacation destinations. No, my friends most likely won’t go for vacation this summer. The tax assessment bills they received in the last days  have spoiled every little mood for even a-week-long vacation away from home. And it’s not only the mood. It’s the damned shortage of money.

Eleni, married, two children, one studies in city 350 km away. While in the previous year she had 1,300 euro in tax return, this year she will have to pay €3,167  (incl. solidarity and trade tax). Her salary was cut at 35% and she had already had taxes directly deducted from her monthly salary.

“I couldn’t believe what I saw,” she said in an angry voice. “I pay rent for my boy 250 euro per month and the tax office accepted only 70 euro. That’s unacceptable!”

The biggest blow to 5,5 million Greek taxpayers came with the lowering of the tax-free income from 12,000 down to 5,000 euro created the first big hole in millions of Greek households. A difference of 7,000 euro which immediately translates 10% taxation, that is 700 euro. Right away.

Our friend Maria, pensioner, got a tax return of 35 euros in 2011. This year she has to pay 2,600 euro in taxes, even though her pension cut sharply cut and she saw Xmas & Holidays bonuses disappearing.

“I will have to borrow from my brother,” she says “or even better, I won’t pay at all.” As Maria has no property or any other assets, she is not even afraid, the tax office would confiscate anything she owes. Then she owes nothing except an old car. “They can take it, I give it as a gift to them,” she says in a nonchalant way.

Last year the Finance Ministry of the indebted country, passed a new taxation bill that except lowering the tax-free income, cancelled the majority of tax excemptions.

Tax exemptions for mortgage interest, medical expenses, rent, etc. were sharply cut. They were replaced by a flat discount only on the tax and not on the income. The discount rate was reduced from 20% to 10%.

The discounts for interest rates of mortgage loans  were cut too and thus at a rate of just 10% and only for homes up to 120 sqm and loans up to 200,000 euro.

The bonus for collecting receipts disappeared and was replaced by an obligatory showing evidence of spending up to 25% of the income. These receipts do not include payments for utilities, telephone or transportation costs.

 The Ministry introduced the solidarity tax of 1% to 4% for incomes of 12,000 euro to 100,000+ euro.

Not to forget the trade fee of 500 euro per year for those self-employed or employees with a second self-employed (free-lance) activity.

And as if all these were not enough, the criteria of so-called “purported” or “deemed” income were introduced. According to these, the tax office ‘judges’ each taxpayer’s income according to his ‘theoretical’ living standard.  

According to this absurd measure, every taxpayer needs 3,000 euro to live within a year. Also maintenance costs of a home are translated into taxable euro depending on the square meter (for example 80/sqm for 120 sqm home). Car maintenance are translated into euro according to cc. Loans and school fees, paying for rent or for life insurance are added as well.

With these criteria of deemed income, the taxpayer’s income soon climbs soon to 12,000+ euro, whether this money entered the taxpayers pockets or not.

Πηγη: Εφημερίδα "Τα Νέα"

From daily TA NEA

“Employed, married, 2 children, annual income 32,000 euro: tax €4,575 in 2010, tax €6,930 in 2011 (for 2012 declaration)

Employed, married, three children, annual income 32,000 euro: Tax €150 in 2010, tax €5,160 in 2011.

Self-employed, single, annual income 15,000 euro: Tax €110 in 2010, tax 1,790 (incl solidarity tax 150 euro and trade fee tax 500 euro).”

 Here is  the nice example of a Greek homeless who would be asked to pay 116 euro in taxes, should he make the mistake and make a tax declaration.

… On Friday night we kept drinking beers and chatting. About where and when this nightmare will stop. Eleni and Maria kept swearing. Maria’s sister said nothing. She makes no tax declaration as she also owes nothing and is without job since four years. Olga and her mom said little as well. Olga works occationally and gets paid normally at a much later time. Without her mom’s pension they two woman would have to sell their home in order to survive.

PS We are all rich but we do not know it 🙂 Latest but still unconfirmed news speak of additional taxes in 2012, because of that stupid hole of 2 billion euro in the state revenues, deficit, call it whatever you want…

I hope that they won’t tax our nightmares.

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42 comments

  1. Just for fun I made a similar tax calculation for living and working in Sweden. If you have a salary of 32000 Euro per year it is about 280 000 SEK. With that salary in an average Swedish city you pay about 65844 SEK per year in taxes, which equals 7700 Euro. (Total salary cost per year for the employer is 42200 Euro, including the taxes/social charges that the company have to pay for employing a person).

    And by the way, I don’t think you want me to calculate the taxes if you are self employed like the example above. 😉

    This is regardless of how many children or how many wifes or husbands you have.

    I of course understand that it is difficult when taxes goes up, and you can always have a discussion about what you get for your taxes.

    • keeptalkinggreece

      living the past behind, nowadays you don’t get much for the taxes you pay here. On the contrary public services work at 60% capacity, public transport schedules a bit rarer than before, state health care system is the nightmare on earth. You need 6 weeks to get an appointment with a doc of insurance fund, sometimes 6 months for a hospital appointment. Last school year, pupils got their books more or less in January.
      BTW: thanks for the Swedish insight tax view.

    • Look, Greece is not a simple country to live and work in. The above account does not reflect reality. In particular, the self-employed have to pay VAT of 23% on their income on top of income tax. They have to pay arbitrary amounts of social insurance that are very high, to get fuck all in return.

      The total tax and social insurance take from a self-employed person on 32,000 euros who declares all income and has no offsets, is something like 18-20,000 euros — that is, over 60%. It is very high by European standards, and there is very little in return. The medical services are crap. the education system is a joke, the state generally is a %^&-up…

      Please, there is no comparison with Sweden yet the tax take is similar. Do no trust the media, they cherry pick their examples to make a political point. They are liars.

      • keeptalkinggreece

        The VAT of 23% is paid by the consumer not by the self-employed. However as many do not issue receipts they complain about the VAT they have to pay out of their onw pockets.

        • You are wrong, KTG. All self-employed professions are required to pay VAT even when they are not consumers or end-users. This is a trick that the Greek state has been using for decades, made worse recently, and it totally illegal under EU rules.

          It is not a matter of receipts. University researchers have to pay both income tax and VAT, and also issue receipts as self-employed. This is the policy of the efories and the Ministry of Education; it was put definitively into law by the criminal Papandreou when he was Proto-Malakas.

          It is a very serious issue, because it is in breach of the fundamental principles of the European tax which is a value added tax — that is, on production and not on workers. Nobody seems to care or even know what is going on.

          Moreover, there are also illegal removals of VAT on research income from the European Commission and other non-commercial research budgets. Again, this is down to the illegal conduct of efories and the Ministry of Economy.

          • keeptalkinggreece

            I’m talking about the private sector, not universities. however if even they issue receipts/invoices they add the VAT that the ‘buyer’ pays, no?

          • I am also talking about the private sector. There is no difference anyway in law between these two sectors as far as certain employment categories are concerned.

            The situation is that when there is no “buyer” — for example, when the European Commission pays for research — there is no person actually to pay the final VAT cost. The EU will not accept to pay it, because it is illegal. So, the individual researchers are forced into paying VAT by the Greek state on their earnings; this is illegal. They are not private research companies who are selling research products to companies: they are employees who are not being employed correctly. This is going on across Greece, and has been the case for at least 15 years.

            The same situation occurs with other self-employed persons who do not have a product that is being sold. VAT cannot be imposed on wages, get the Greek state does so. And does the Troika worry about this? Hell no, it increases the revenue collected”: why should they give a f&*k about the rule of law? Or the high taxes paid by people on low incomes? It is further evidence that Europe is run by a crowd of criminals who should be in prison: that includes Germans, French and others as well as the entire Greek political class.

          • keeptalkinggreece

            we do not talk exactly abou tthe same thing. Are Greek universities private sector?

          • Most of the uni research centres are under private law, even though they are theoretically part of the uni. The same goes for some parastate research centres such as KEPE, which is owned by the Finance Ministry but has both public and private status. They can choose which laws to follow and usually choose private sector.

            Regardless of this, independent workers such as self-employed writers are often being refused employee status and have to work as self-empoyed, and thus have to pay VAT. Again, there is no consumer of the product so this is in breach of EU rules.

            When I was forced to do this, 10 years ago (both working for a private NGO and a uni centre) I had to pay an accountant to present 6 sets of accounts for each year: 4 quarterly VAT accounts, one annual VAT account and one income tax account. Even then, it was a big fight to be allowed to offset VAT with essential equipment purchases, and without a good accountant (who was not so cheap) it would have been impossible.

            The Greek state does not obey the laws of Greece or the EU. There qre plenty of illegal ministry circulars, instructing civil servants to break the law while pretending to be clarifying the law. Since ministry and eforia officials rarely understand law, they take all their instructions from these illegal circulars. I have copies of some, including one from the Finance Ministry dated 1997 which is the biggest pile of legal crap I have ever seen in my life. It contaoins mis-statements of EU law, incorrect understanding of basic principles of law (a circular cannot predict the meaning of future laws) and complete nonsense generally. It advises efories that no EU citiaens if allowed to pay Greek taxes without the written permission of thier embassies. Abject rubbish.

  2. Here’s a way to solve the problems, or at least a good few of them. Even Samaras has ackowleged that parliamentarians are overpaid, and proposes a cut of 30%. I would propose a cut of 75%. It still leaves them with 270€ a day, but saves the country nearly 54 million a year. Not a bad start.
    Because you never know what you are going to actually get from them, it is a bit pointless paying them full whack all day every day. Just like if you don’t pay a shopkeeper full whack for something he’s got to order in for you. You pay a deposit. So it should be with politicians. Lets pay them minimum wage as a deposit, like most others get, 400 a month. If they deliver, in time, on time, as promised, they can get the rest.
    How do they know people are happy with what they deliverd? Next election of course. If re-elected, they get the difference, if not re-elected, though, “no cure-no pay”, that’s life. Over 4 years this means another 100 million + that can be used to help dig the country out of the hole it’s in.
    Over the life time of a government, it means that Parliament would contribute over 300 million to the recovery of the country, all on its own. Or, more than 1 million per parliamentarian over 4 years. Surely, as law makers and government they should be giving the example instead of simply fleecing everybody for every cent they are perceived to have?
    Or have I got that wrong?

    • keeptalkinggreece

      you got it too thoughtful 🙂

    • Hahaha, the very idea of paying politicians no more than they are entitled to! Really, this is the stuff of revolution!! Next, you’ll be telling us that our money is safer under the bed than in a bank!!!

      • Indeed, it would seem that it is safer under the matrass. But seriously, which other employee anywhere is allowed to set his/her own wage and sign his/her own paycheck?
        Because, at the end of the day,politicians all over are the employees of the people, employed on a temporary contract (4 years) with the specific task of managing the country on behalf of the people. Apart from having mad a total balls of the job, I would have thought it fairly normal that the people would at least have control over what they pay their employees, and the right to set that pay scale as they see fit, no?
        And as pay should not just reflect the importance of the job, but also reward the manner in which it is carried out…

        • keeptalkinggreece

          people employ politicians for 4 years, politicians employ people for 6-8 months (temporary contracts) lol –

    • I think that’s Warren Buffet’s idea!

  3. Die Linke’s Katja Kipping has a partial solution to the deficit problem: “40 000 euro a month is enough”: http://www.faz.net/aktuell/wirtschaft/katja-kipping-im-gespraech-40-000-euro-im-monat-sind-genug-11788075.html

  4. The greek debt cannot be repaid in ones lifetime. It will be transformed into rent and tax payments for the lifetime of many greek generations.Debts are the way to servitude when more growth is no longer possible.

    The alternative is to pick a fight with the creditors, declare independence and default on the debts. USA can do this, but Greece?

    • Hardly anybody believes anymore the Greek debt will ever be repaid. The math is almost impossible to handle, and there’s no support in the population for taking up the bill. And among the creditor nations, there’s no political support for paying for Greece’s debt service indefinetely, neither. So, Greece will certainly default, sooner or later. Here’s hoping it will be sooner. Enough already, let’s put an end to this nonsense!

      • That’s exactly what SYRIZA and Tsipras said 3 months ago. then you declared them out of their minds….

        • I’m very sure I didn’t say that I have any hopes that the Greek debt will be paid back. And Syriza stated determinedly that they don’t want to leave the Euro. Have you already forgotten that?

      • Even if they do eventually default (for the second time) the fiscal policies and structural reforms being asked by the troika will still be necessary for Greece to avoid becoming a third world nation. Going bankrupt and leaving the EZ will not be the solution that most Greeks want for Greece, IMO.

        • You can’t always get what you want
          You can’t always get what you want
          You can’t always get what you want
          But if you try sometimes well you might find
          You get what you need

      • Gray

        You’re right, Greece won’t be able to pay its entire public debt anytime soon, but this is not one of the main goals of the loan agreements and the second memorandum. Following the implementation of structural changes the primary goal is to reduce Greece’s public debt to below 120% of GDP in the next 8-10 years. It could be achieved if among others projected growth rates are proved to be correct, and the country develops primary budget surpluses after 2014. If the country fulfills its commitments to the troika, then it’s quite probable that the € 50 billion used to recapitalize the Greek banks would be deducted from its public debt. The result would be an additional 25 point drop in the public debt to GDP ratio, thus bringing it to a sustainable level. Germany’s current public debt is about 81.2 % of GDP while its gross external debt is roughly 132% of GDP.

        What gives me hope about the future of the Greek economy is that now: 1)There’s a well thought plan, 2) Goals with timelines have been established and 3) The granting of each loan tranche is conditional upon the implementation of structural changes. The time of fuzzy math and political apathy has long passed.

        Greece has a long way to go, a number of hurdles to overcome, but with hard work and unwavering determination, there’s a bright light at the end of a long and dim-lit tunnel.

        • “but with hard work and unwavering determination, there’s a bright light at the end of a long and dim-lit tunnel.” Dream on my friend.

          That bright light at the end of your tunnel is an oncoming train, be prepared…

          • keeptalkinggreece

            lol

          • Ephilant

            No obstacles are insurmountable, a political national team of the willing having the cooperation of the Greek people will build together a one-way railroad track inside the long and dim-lit tunnel. The proud, hard working and hard tested Greeks will surpass all the impediments and prove all the naysayers wrong.

          • Nicolas,
            The only willing political national team you’ll ever put together, in any country, is one that finds ways of trousering as much as they can, in as short a period as possible, with total disregard of its effects on society as a whole. If you really need examples of that, just read some of the last post on KTG.
            Governments have no interest in cooperation from or with “the people”. Governments everywhere go by the “divide and rule” principle, nothing else. Laws are passed that set worker against employer, man against woman, married against single, child against parent, public servant against private employee, catholic against protestant, the list is endless. The division bell rings loud and clear in every country (Thanks Pink Floyd). Wake up and look around Nicolas, Romanticism like you envisage and very eloquently describe is fantasy of the largest magnitude.
            As Aldious Husley once said, Armaments, universal debt and planned obsolescence — those are the three pillars of Western prosperity. And none of them are achieved by “cooperation”, on the contrary. All of them lead straight into that oncoming train though. Which is exactly where we are. Right now, we are playing chicken with an oncoming high speed train. The only problem is that there is nowhere to jump to to get out of its way…

            The ONLY way out of this mess is for society to divise a payment system that enriches society as whole, without any possibility of selectively enriching indiviuals or selected groups of individuals within that society.
            Any other system fosters greed, and that’s what got us where we are. No matter how nicely you phrase your denial of reality, it remains reality, and you would be a wise man to wake up to it.

          • Ephilant

            The national political team of the willing will give the Greek people hope for a better tomorrow, make them optimists, and ensure that there’s bright sunlight at the end of a very long, dim-lit tunnel. The Greek people will in time think and act like Olympiakos. Been behind 19 points with 12 minutes remaining before the end of the game, the whole team didn’t give up but kept its spirits high. Olympiakos played better, smarter, tougher, persevered and gradually closed the big point deficit. When the final buzzer sounded, Olympiakos was the winner of the championship game by making an incredible and unprecedented comeback. On May 13, 2012 Olympiakos was crowned in Constantinople the 2012 Euroleague Basketball Champions.

          • Kudos for Olympiakos, Nicolas. But reality isn’t a baskeball game…
            Greece will very soon be crowned champions of the cheap workers market for Germany. And that’s about the only crown it will wear for a very long time to come. Read my comment on Deutsche Bundesbahn as to why.
            The exploitation is in full swing, and the only way to stop this oncoming train is to de-rail it, permanently. 3-point baskets or slam-dunks aren’t going to cut the mustard here my friend.
            By the way, you should start writing short stories or so. Your use of language is absolutely stirring, rousingly ideologic, patriotic and romantic. Worthy of a Tony Blair speech. But sadly, as misplaced.

          • Ephilant

            The Greek people will prove all the naysayers wrong.

          • Although totally misplaced, I have to comment your unwavering optimism on this Nicolas. Unfortunately, it’s dangerously naieve, and you are in for one hell of a wake up call, soon. Have the headache pills ready, you’ll need lots of them!

          • “The national political team of the willing will give the Greek people hope for a better tomorrow”

            Would you telling us who this “political team of the willing” are?

  5. LOOKS LIKE THE GRAVY TRAIN HAS HIT THE BUFFERS…!! EVERYBODY MUST PAY TAXES….!! ITS CALLED DEMOCRACY…!! Oh, SOMETHING THE GREEKS STARTED I BELIEVE….?? REACH UNDER THE BED AND GRAB A HANDFUL OF EUROS… COME ON YOU KNOW YOU WANT TO…!!!

    • keeptalkinggreece

      deaf men do not pay taxes, didn’t you know? why shouting?

    • giaoýrti giaoyrtáki

      Democracy is just a translation mistake of some Philohellens who still demand today that there are so many Greek words in other languages but then can’t explain why no Greek understands those “Greek” words. Democracy is slavery and so taxes are illegal. The future is to extend the shadow economy while kicking out the Mafie. If nobody pays taxes any more the state will stop to exist. Freedom only can be without states.