Corporate tax to rise to 30 pct
The Finance Ministry is making plans for a single tax rate for the incomes and profits of the self-employed and medium-sized and large enterprises, Kathimerini understands.
The tax rate will come to 30 percent for every taxpayer excluding salary workers and pensioners, meaning the aforementioned categories will not have any other tax obligations. The increase in corporate tax to 30 percent will automatically mean that companies no longer have to pay a tax on distributed profits.
The government?s aim is to beat tax evasion and to bolster revenues from professional categories that are believed to conceal a significant part of their incomes, according to the statistical data compiled by the Finance Ministry.
For the self-employed, the plan provides for abolishing the tax-free threshold so that they will be taxed from the first euro of their annual income. The tax-free threshold currently stands at 5,000 euros per year. Today a self-employed professional with an annual income of 40,000 euros pays the tax authorities 8,820 euros per annum, while with the single tax rate that amount will rise to 12,000.
There will also be changes in tax deductible expenses. The system will become much stricter but the government is still seeking ways to have more oversight regarding the spending of the self-employed.
Today, major companies pay taxes of 20 percent on the profits they declare to the authorities. In the case of dividend distribution, shareholders also pay a 25 percent levy, taking the total amount of tax to 45 percent.
Due to this policy a number of enterprises have created subsidiaries in the European Union, particularly in countries with very low tax rates. The ministry now hopes it will collect more revenues by abolishing tax on dividends and raising the corporate tax to 30 percent, thereby stopping the flight of companies from Greece.
