BUSINESS

Most people can expect to see their tax bills increase

PROKOPIS HATZINIKOLAOU

TAGS: Taxation

The majority of taxpayers will suffer retroactive tax increases that affect their incomes from January 1, 2016, according to a bill that was to be passed into law in Parliament on Sunday night.

The level of the income tax-free ceiling for Greece’s salary workers, pensioners and farmers will be determined by the number of children dependent on each taxpayer.

As the new law dictates, the hitherto level of 9,550 euros of income exempt from taxation per annum (effective through a tax discount of up to 2,100 euros per year) will now only apply to taxpayers with at least three dependent children, as in all other cases the ceiling will drop to as low as 8,636 euros, which translates into a tax discount of 1,900 euros for taxpayers without children. Those with one dependent child will have a tax-free ceiling at 8,863 euros while those with two children will not pay any tax on incomes up to 9,100 euros per year.

There will be no tax-free allowance for freelancers and the self-employed.

Nevertheless, the new rates both for income tax and the solidarity levy will reduce the burden on taxpayers with annual incomes of between 28,000 and 43,000 euros. The reason is that this income bracket has suffered the biggest tax hikes over the last few years. On the other hand, there will be a major increase in taxes for taxpayers with incomes above 43,000 euros per year.

The new tax law further provides for an increase in taxation for those with incomes from property rentals, along with a hike in the tax on dividends as well as the tax rate for small and medium-sized enterprises from 26 to 29 percent.

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