Greeks are shocked. And swept away by the tax tsunami that hits them amid deep recession, political and economic uncertainty, and the threat of euro exit swinging above their heads. The tax statements that reach millions of households make taxpayers to hold their breath. Even though incomes were decreased at 30% in 2011, for the same tax year Greeks are called to pay higher taxes and thus eight of them within the following months.
Changes in the taxation law have resulted into taxing not real income but ‘deemed income’. If the real income is lower than the ‘deemed income’ the tax contribution will be according to the latter. “Deemed income” criteria went 200%. Further the tax free amount was lowered from 12,000 euro down to 5,000. Tax returns are almost down to a minimum due to the new taxation criteria, the bonus tax return due to receipts collection for expenses has been cancelled.
Taxing the Poor…
If a taxpayer in Greece has 5,000 euro gross annual income, he has to prove through receipts that he had spent 1,250 euro. If he can’t he will be fined with a 10% of this amount he ought to have spent.
Even people with zero income will be forced to pay taxes due to ’deemed income’.
Owner or a leaser of a 50 sq.m. flat and a 1200 cc car, will have to pay tax even if he has no income. According to taxation law, maintenance costs for 50 sq.m. are 2,000 euro per year, and 4,000 euro for the car. To this 6,000 euro, tax authorities add 3,000 euro as ‘living costs”. From the end amount of 9,000 euro only 5,000 is tax free. For the rest 4,000 euro, the taxpayer will have to pay 10% that is 400 euro tax even if he has zero income.
An additional 10% of tax will be applied if the taxpayer cannot cover the required amount of expenses with receipts.
That is if the taxpayer declares 5,000 euro income but the deemed income is 8,000 euro, he needs to cover with receipts an amount of 2,000 euro. has he no receipt, he will pay additional 200 euro.
Deemed income requirements are decreased at 30% for pensioners over 65 years old.
Supposedly you have a part time job or full job with 420 euro per month. The flat leasing contact is under your name. Your living expenses are covered by relatives and friends or partner.
A tax is in at any case. Taxpayers in the income class 12,000-16,000 euro gross will see 700 euro fleeing their annual budget.
The same applies for long-time jobless with zero income.
What if the EU declares as poor annual gross income of 6,000 euro? Greek governments know better…
Taxing Income below 900 euro/month
Employee unmarried with no children will pay income tax at least 620 euro for 11,200 euro gross income. But 934 euro tax if he earns 12,600 euro per year. This ‘net’ amount is equal to a ‘gross’ months salary.
If he cannot come up with enough receipts, his deemed income is higher and is owner of a property, he would most propably will have to spend the summer months without food and water…
The state needs to collect 2 billion euro as soon as possible.
Greek media report that 6 out of 10 tax declarations contain no tax returns.
Solidarity & Property
Additionally to income tax for the year 2011, Greeks will have to pay:
- “Solidarity tax” for 2011 (starting from 1% for incomes from 12,000 to 20,000 euro and increasing); Solidarity tax is deducted from salary as of 1.1.2012
- “Trade fee” (500 euro; 300 last year).
Property owners will get on their knees as they will have to pay at least three property taxes: the regular property tax for 2009 (ETAK), the regular property tax for 2010 (FAP) for properties worth more than 400K euro, the regular property tax for 2011 (FAP) for properties worth more than 200K euro, the emergency property tax for 2012.
And yes! The big losers are those with income 12K-16K euro gross per year. As usual…
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