Greek VAT rates at centre of EU crisis talks
- 31 May 2015 | Richard Asquith
Discussions around the continuing support for the bail out of Greece continue to include potential changes to the Greek VAT rates.
The 'Troika' of the European Central Bank, European Commission and International Monetary Fund is pressing for a new standard VAT rate of at least 20%. The current standard rate is 23%. The government is still proposing a flat rate of 18% VAT.
What is clear is that many exemptions and reduced rated goods and services will be moved to the standard rate. This may include tourism services, and the reduced rate applied to many of the holiday islands.
Greece is dependant on reaching a fresh deal with its creditors within the next fews weeks as it is close to running out of money and cannot raise funds on the international money markets. The creditors are looking for drastic measures, including increased tax revenues from VAT, before they agree to a release of further funding. This could mean the anti-austerity government of Syriza having to compromise on some of its spending plans.
It is hoped that a deal, including any VAT changes, can be reached this week.