BUSINESS

E-spending discount details are out

PROKOPIS HATZINIKOLAOU

TAGS: Taxation

The Finance Ministry has finally issued a list detailing the types of electronic spending – credit and debit cards, e-banking and money forwarding – that will count toward the income tax discount granted to most taxpayers as of this year. Just a handful of expenses are excluded, meaning that the threshold will be attainable for most, while non-Greek EU citizens are exempt from the measure even if they submit an income tax declaration in Greece.

According to the decision, signed by Deputy Finance Minister Katerina Papanatsiou and published on Friday, it is only electronic payments of mortgage loans, rent, taxes of all forms, real estate acquisitions and vehicle purchases that are exempt from the sum required to be met by each salary worker, pensioner and farmer every year in order to establish the right to a tax discount of between 1,900 and 2,100 euros (depending on family status).

This means it should be quite easy for taxpayers to spend the necessary amount in electronic transactions (between 10 and 20 percent of income, depending on the total) to qualify for the discount and avoid a penalty (amounting to 22 percent of the amount by which they failed to make the threshold). Everyday expenditure such as grocery shopping, utility bills, phone bills, spending on education, fuel costs (including heating oil), tobacco, alcohol, food and drink, hotel accommodation etc will all count.

Crucially, the measure exempts those aged 70 and over, those with a disability rate of 80 percent or more, and non-Greeks who are citizens of European Union or European Economic Area countries who pay income tax in Greece. They will still have to collect paper receipts to secure a tax discount.

The ministerial decision also stresses that healthcare expenditure will not go toward the e-spending discount, as it is deducted from taxable income separately. That tax reduction amounts to 10 percent of the sum spent on doctors and hospitals – in Greece and abroad – provided that this exceeds 5 percent of each taxpayer’s taxable income.

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