Value Added Tax (VAT) in Greece is a fundamental element of the country’s tax system, impacting a wide range of goods and services. VAT is a consumption tax that contributes to government revenue and supports public services. Greece’s VAT framework includes a standard rate, reduced rates for specific categories, and exemptions to address various economic needs.
VAT Rates in Greece
Greece’s VAT system includes the following rates:
| VAT Rate | Percentage | Description |
|---|---|---|
| Standard Rate | 24% | Applies to most goods and services, providing significant revenue for the government. |
| Reduced Rate | 13% | Applied to specific goods and services such as foodstuffs, certain beverages, and some hotel accommodation. |
| Super Reduced Rate | 6% | Applied to essential items like books, newspapers, and certain cultural services. |
| Zero Rate | 0% | Applies to exports and international transport services to support global competitiveness. |
| Exemptions | – | Includes financial services, insurance, and specific medical and educational services. |
Notes:
- Standard Rate (24%): The general VAT rate applied to most transactions in Greece.
- Reduced Rate (13%): Targets specific goods and services, such as food and certain beverages, to make them more affordable.
- Super Reduced Rate (6%): Focuses on essential cultural and informational items like books and newspapers.
- Zero Rate (0%): Ensures that exports and international transport services are not subject to VAT, maintaining Greece’s competitive edge in global markets.
- Exemptions: Cover sectors such as financial services, insurance, and specific medical and educational services to reduce the tax burden on these critical areas.
Purpose and Impact
The VAT system in Greece is designed to:
- Generate substantial revenue for public services and infrastructure development.
- Provide financial relief for essential goods and services through reduced and super reduced VAT rates.
- Support international trade by applying the zero rate to exports and international transport services, enhancing Greece’s position in the global market.
Understanding VAT in Greece is essential for businesses and consumers to navigate the tax system effectively and ensure compliance with Greek tax regulations.