Greece Tax Hike Hits Popular Islands
- Sales Tax Rate Changes
- Sep 30, 2015 | Gail Cole
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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