ECONOMY

Tax-free threshold in the cards

tax-free-threshold-in-the-cards

Alternate Finance Minister Tryfon Alexiadis confirmed on Wednesday that, as of next year, the system of collecting receipts from cash payments to enjoy the benefits of the income tax-free threshold will come to an end. Instead, only those who spend at least 10 percent of their income using credit or debit cards will qualify for the discount. This will include payments for medical expenses.

Alexiadis told ANT1 TV that “for 2015 we will continue to collect receipts, but we are considering increasing the tax-free amount of the yearly income through the use of plastic money alone, including expenses such as medical bills.” He went on to say that because doctors had comfortably eased into the electronic prescription system, they shouldn’t have any problems entering the card payment system either.

To continue to have part of their income exempted from tax, taxpayers will need to have spent an amount equal to 10 percent of their income using a credit or debit card. Therefore, to have the tax-free threshold of 9,550 euros, as is the case currently, or 12,000 euros, if that is the case as of next year, they must change the way they pay for products and services from cash to plastic money. Crucially, it will be banks that will directly inform the tax authorities of the payments made through each taxpayer’s card on an annual basis.

Taxpayers who don’t use credit or debit cards will likely miss out on a tax exemption, although it is possible some exceptions will be made for those who are unable to do so.

The government’s plan has the support of the Hellenic Confederation of Commerce and Enterprises (ESEE), whose president, Vassilis Korkidis, stated on Wednesday that “enterprises are not afraid of the prospect of a card-based tax-free threshold; they welcome it.”

Addressing the 1st Athens Digital Payments Summit, Alexiadis said the 2 percent commission banks charge enterprises for card transactions is too high, adding that even the state does not impose such a high tax on enterprises. General Secretariat for Commerce officials say pressure is being exerted on the Hellenic Bank Association for the above commission to be reduced.