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Greece Tax Hike Hits Popular Islands

 Will they still come with higher VAT rates?

The Cyclades islands, which encircle the sacred island of Delos in the Aegean Sea, are among the most enchanting destinations in Greece. Millions of visitors, both Greek and foreign, flock there each year. They come for the beaches, culture, and history — and arguably for the low value added tax rates many Greek islands have historically enjoyed. Will they continue to come after October 1, 2015, when value added tax rate increases take effect?

According to the Greek Finance Ministry, “As of 1 October, sales tax rates equivalent to the rest of the country will apply on Rhodes, Santorini, Mykonos, Naxos, Paros, and Skiathos.” No longer will these islands receive the steeply discounted rate they have long enjoyed. The new rate is 23%, up from 16%.

This is the first wave. The second wave will hit June 1, 2016, and the third January 1, 2017. Eventually, if tax evasion subsides and tax revenue increases, “the hike may be revised.” Don't hold your breath, "Tax evasion is a national sport" in Greece; however, tax inspectors are out in force.

Other tax changes took effect in July, when a higher VAT was imposed on services such as admissions to cinemas, restaurant and transportation services, and some foods.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.