Download World Tax Summaries: Taxation in Greece

Press Release
Date
26 Μay 2016
Contact
Alexandra Filippaki
Tel: 210 6874490
e-mail: [email protected]
Pages
4
More information here
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Worldwide Tax Summaries – Corporate Taxes 2015/16 – Taxation in
Greece
Following the release of the global PwC report “Worldwide Tax Summaries Corporate Taxes 2015/16” analysing the collection of corporate tax rates and
regulations for more than 150 countries, PwC Greece proceeded with a more detailed
analysis and comparison of the Greek tax system.
The Greek tax system is characterised by high tax rates which do not, however, result
in the anticipated tax revenue. At the same time, while total annual tax revenues have
remained fairly stable, the tax parameters are constantly changing, leading to a
number of peculiarities, as for example:
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−
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7 changes in the corporate tax rate on since 2005 (nervousness)
tax-free income, 2x the poverty threshold (many income categories are excluded)
low minimum tax-free income and low income threshold for the maximum tax
rate (medium income is punished).
In Greece, tax rates in all categories are among the highest in Europe, with tax
collection, however, at the average or even lower level. The continuous changes in tax
parameters do not seem to have a substantial impact on tax collection. During the
economic crisis, the contribution of VAT and other indirect taxes remained stable,
while the share of corporate taxes collapsed. Income taxes as well as property taxes
rose consistently.
The main conclusions of the study are:
 Tax revenues in Greece are mostly based (94%) on consumption taxes (VAT,
indirect taxes), personal taxes (income tax, special solidarity tax, luxury tax),
and, property taxes.
 In general, there are no signs of over-taxation compared to other countries,
excluding indirect and property taxes
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 Property taxation in Greece has increased over the last five years, by €2.5 –
3bn., contributing to the drop of house prices and the divestment in the real
estate market
 VAT and indirect tax receipts are not particularly sensitive to GDP changes
compared to property and corporate tax revenues
 The tax system operates in a way not facilitating tax collection. It penalises the
middle incomes, while inflates the undeclared income
 Absolute tax revenues in Greece have been going down over time, although
increasing as a percentage of GDP, suggesting real difficulties in raising
additional tax revenues in a protracted crisis
 The VAT deficit is estimated at 34%, indicating a significant shortage in tax
revenues due to tax evasion, tax avoidance and the ineffectiveness of the tax
collection mechanism
 Growth is the only way for tax receipts uplift. Indicatively, GDP growth of 10%
would increase total tax revenues by 11.3%
 The total reconfiguration of the tax system in the direction of simplification,
reduction of tax rates, increase in tax free income appears as the key to
becoming fiscally more effective, whilst facilitating growth at the same time.
Mary Psylla, Partner and Tax Leader of PwC Greece stated:
“It is of utmost importance to change the tax system. Tax collection
performance lags behind the European average, while the system’s
distortions hamper tax collection. Complexity and ineffectiveness are
the Greek tax system’s main features, posing obstacles both to fiscal
consolidation and growth”
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Graph 1: Total Tax Revenue/capita and GDP/capita
Tax Revenues/capita, PPP (International $ in k)
38
Luxembourg
Norway
26
24
22
Denmark
Belgium
20
Finland
18
Austria
Sweden
Netherlands
Germany
France
Italy Iceland
16
14
UK
Japan
Czech Republic
Spain
Slovenia
12
10
Greece
Hungary
8
Poland
6
Portugal Israel
Slovakia
Korea
Estonia
Canada
Switzerland
Ireland
Australia
New Zealand
Turkey
4
12
16
20
24
28
32
36
40
44
48
52
56
60
64
68
96
GDP/capita, PPP (International $ in k)
Source: European Commission, PwC Research
Graph 2: VAT Gap in the EU
100%
VAT Receipts (% VTTL)
Finland Netherlands
Luxembourg
Slovenia
France
Portugal
Denmark
Ireland
UK
Austria
Belgium
Germany
Sweden
95%
90%
Estonia
Spain
85%
Bulgaria
80%
Czech Republic
Hungary
Malta
Poland
75%
70%
Latvia
Italy
65%
Greece
Slovakia
Lithuania
60%
Romania
55%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
VAT Gap (% VTTL)
Source: European Commission (TAXUD), Parliamentary Budget Office
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About the study
The Worldwide Tax Summaries report is available in four forms: on paper, in ebook, in PDF format
and online. You can find it here. Through the website, the user can have access to the most updated
figures regarding important tax developments for over 20 categories of personal and corporate taxes,
while there are provided the key dates of the most recent revisions. There is also a list of specialists in
corporate taxation of PwC member companies around the world who can offer advice and support.
About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of
firms in 157 countries with more than 208,000 people who are committed to delivering quality in
assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at
www.pwc.gr
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legal entity. Please see www.pwc.com/structure for further details.
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