News coming out of the EU suggests that Greece is planning on implementing a flat VAT rate of 18% and also reduction in their list of exemptions. Greece currently has one standard VAT rate of 23% and two reduced rates of 13% and 6.5%, these would be combined so there is only one rate of 18% meaning that the standard rate will fall by 5% but the reduced rates will see a significant rise. Medicines would be the only exemption, although tourism VAT rate is also expected to stay at 13%. The special status granted to Aegean islands, with a 30% discount on VAT rates, will be abolished.
This is part of the Greeks government’s negotiations with creditors to start reducing their high levels of national debt, and increase revenues. Nothing has as yet been approved and the rate would not be implemented till late 2015 at the earliest.