Referendum

Greece presents new bailout proposals

Greece new bail out proposals

Greece have outlined their latest VAT proposals since the ‘No’ referendum last Sunday, so far their main points include:

• Cuts to military spending.
• VAT changes.
• Corporate tax increases.
• Raising retirement age to 67.
• Crack down on tax fraud.
• Increase tax on shipping companies.

The key VAT points are:

• 30% relief for Greek islands to be scrapped – only the most remote islands will keep these tax breaks.
• Restaurants and catering services VAT will rise from 13% to 23%.
• Reduction of the 6.5% to 6%, now only applicable to books, theatre admission and certain medicines.
• A Reduced 13% tax on basic foodstuffs. Continue Reading

Greek financial crisis – possible VAT changes

July 2015

Greek VAT reforms in the economic crisis

Yesterday Greece became the first European Union country to miss their deadline to repay a loan, totaling around £1.1bn, from the International Monetary Fund (IMF), after their request for another extension for the previous bailout was denied on Tuesday. By being in arrears to the world’s financial backbone, Greece immediately lose access to IMF resources and could eventually be kicked out of the fund entirely. If the country goes bankrupt or decides to leave the 19-nation Eurozone, the situation could create instability in the region and resonate around the globe.

Greece’s total debt is around €360,000,000,000 which is 180% of its GDP and with around 25% of its citizens unemployed what are Greece doing to try and combat this economic crisis?

Greece’s latest proposals are focused on VAT rates, early retirement measures and tax increases, which aim to cover a good part of the country’s budgetary gap, which is around €900M, the proposals around VAT could bring in around two billion euros. In terms of the VAT proposals last week the government offered VAT increases on a range of products, so the standard rate of 23% would remain but the scope would change with the standard rate being extended to more products including:

• Water supplies
• Transport of passengers
• Social housing
• Repairs to private housing
• Agricultural imports
• Social services
• Food Outlets
• Hotel stays

But nothing is so far confirmed with many other products and services also in the mix for potential VAT raise and the lower 6% reduced rate could be limited to books and medical supplies. Greece’s creditors also want the 30% VAT discount applied to Greek islands eliminated making VAT uniform throughout the country but Greece wants to keep the discount in place. Continue Reading