Here’s an overview of VAT (Value Added Tax) rates in Greece:
VAT Rates in Greece
| Category | VAT Rate | Notes |
|---|---|---|
| Standard Rate | 24% | Applies to most goods and services. |
| Reduced Rate | 13% | Applied to certain essential goods and services, such as food, energy, and hotel accommodation. |
| Super Reduced Rate | 6% | Applies to specific goods and services, including books, medicines, and theater tickets. |
| Zero-rated Supplies | 0% | Includes exports and international transport services. |
| Exempt Supplies | Exempt | Includes certain financial services, healthcare, education, and cultural services. |
Detailed Explanation:
- Standard Rate (24%): This is the main VAT rate applied to the majority of goods and services in Greece. It is one of the highest VAT rates in the European Union, reflecting Greece’s efforts to stabilize its economy and generate revenue.
- Reduced Rate (13%): This rate is applied to essential goods and services to make them more affordable. It covers items like food, non-alcoholic beverages, electricity, and natural gas, as well as hotel accommodation.
- Super Reduced Rate (6%): This special rate is reserved for highly essential goods and services, such as books, newspapers, medicines, and tickets to cultural events like theater performances.
- Zero-rated Supplies (0%): Goods and services in this category are taxed at a 0% rate, which primarily includes exports and some international transport services. Businesses dealing with zero-rated supplies can reclaim VAT on related inputs.
- Exempt Supplies: Certain services are exempt from VAT, meaning no VAT is charged, and businesses cannot reclaim VAT on inputs. This includes sectors like financial services, healthcare, education, insurance, and certain cultural activities.
Additional Points:
- Special Rates for Specific Regions: Greece has implemented lower VAT rates for certain islands in the Aegean Sea to account for their geographical and economic challenges. For example, the standard rate might be reduced from 24% to 17% on these islands.
- VAT Compliance: Businesses operating in Greece must register for VAT if their annual turnover exceeds the threshold set by the Greek tax authorities. They must also comply with EU VAT directives, as Greece is a member of the European Union.
- Economic Impact: The VAT system in Greece is crucial for the country’s public finances, especially following the economic crisis. VAT revenue is a significant component of the government’s budget.
These VAT rates and regulations are managed by the Independent Authority for Public Revenue (AADE) in Greece and are subject to updates in line with national and EU policies.