New real estate tax with “objective assessment”, leapfrog with taxes and fees, changes in electronic receipts, tax increases and cuts and … cash prizes for “good taxpayers.”
In 2022, private sector employees will continue to receive an increase in their monthly salaries due to the suspension of special solidarity contributions and the extension of the reduction in insurance premiums. Businesses will be taxed at a reduced rate, the self-employed and those who receive rental income will be burdened with lower taxes, small and medium-sized taxpayers will see their real estate tax (ENFIA) decrease, while those using plastic cards in day to day transactions will receive a tax deduction of up to € 2,200 if they request and receive receipts from certain business sectors.
At the same time, the tax rate is changing and large cash prizes will be paid, which will reach 50,000 euros per month. And on Christmas, the authorities promise a jackpot when lucky taxpayers have a chance to win up to € 100,000. In addition, some 700,000 companies and self-employed individuals who received support in seven rounds of repayable advances took a break until the end of June as the start of government aid payments (disbursed in spring and summer 2021) was “frozen” for six months.
The transfer of real estate to inheritance, donation and other procedures related to the transfer of property rights to real estate have moved into the digital era, and until the summer, inheritance declarations will be submitted electronically. At the same time, the Treasury Department and AADE are planning to make changes to the chronology of payment of ENFIA and income tax.
What taxes will be changed in 2022
1. The cancellation of the solidarity contribution, promised for 2020, will keep the reduction of insurance premiums by 3 points for the private sector.
Thanks to the abolition of this contribution, the annual salary increase of employees will be from 108 to 540 euros, due to the preservation of reduced contributions, and from 49 to 2771 euros due to the abolition of the solidarity contribution (depending on the amount of earnings). For example, an employee with a gross salary of 1,000 euros (847 net) receives an increase in annual income of 132 euros from a reduction in insurance premiums. An employee with a gross salary of 1200 euros (1016 net) has an annual allowance of 207 euros (158 euros from the reduction of insurance premiums and 49 euros from the solidarity contribution, reduction of insurance premiums and 461 euros from the solidarity contribution).
2. New objective appraisal of real estate
On New Year’s Eve, across the country are introduced new zonal methods of real estate appraisal… In more than 7000 districts, prices will rise, increasing taxes and fees, around 2000 they will decrease, and in the remaining 4000 they will remain the same. Until January 31, 2022, taxpayers will be able to conclude contracts of purchase and sale, parental benefits and donations of real estate with the old objective values, subject to the submission of the relevant declarations to the tax office by December 31, 2021.
In Attica, prices in the new zone have been increased to 95% in the center of Athens, to 76% in Chalandri, 75% in Daphni, 62% in Anavyssos, 60% in Agios Dimitrios, 57% in Elliniko, 53% in Glyfada and 41% in Zografu … Herodes Atticus owns the scepter of the capital’s most expensive street, where the price in the zone has jumped to € 10,200 from € 9,000, while Limos Vouliagmenis maintains the glamor of the most expensive area, where the pool tax has skyrocketed from € 8,900 to € 10,800.
The highest growth was recorded on the island of Ithaca, by 250%, as the price in the zone rises from 600 euros per sq. M. To 2100 euros. In three zones of Mykonos by 229% (from 1200 euros for 3950 euros), in Rhodes by 200% (from 700 euros to 2100 euros), on Kos by 108% (from 650 euros to 1350 euros), on Kassandra, Halkidiki at 94 % (from 800 euros to 1550 euros), in Lagonisi – 93% (from 750 euros to 1450 euros), in Kefalonia – 79% (from 700 to 1250 euros), on the Heraklion peninsula – 75% (from 600 euros to 1050 euros ), in Anavyssos 62% (from 1050 euros to 1700 euros), in Maroussi by 54% (from 1300 euros to 2000 euros)
3. New ENFIA
The abolition of the property tax, promised in the elections, will not be expected. And by the end of March, property owners will receive a new ENFIA invoice, which will come to more than 6.3 million property owners. Payment will be made in 10 or 12 monthly installments. The Ministry of Finance plans to change the ENFIA calculation scale, which will provide a slight reduction in the tax burden for property owners located in areas where the price of the zone will rise from January 1, 2022. The government’s commitment is that most owners will pay less than ENFIA in 2022. Those who are expected to pay more taxes next year compared to this year are property owners in the area where the price will be increased, and their (see above) more than 50%.
4. Additional tax deduction for electronic receipts.
From January 2022 to 2025, 30% of expenses incurred by taxpayers using electronic means of payment for certain professional sectors and up to € 5,000 per year are deducted from the taxable income of individuals. The list of occupations includes architects, lawyers, funeral homes, personal care and grooming services, cleaning and maintenance services, babysitting, limousines and taxis, laundries, yacht rental services, consulting services, photography services, and gyms. According to the new regulation, the tax reduction will fall to 450 euros for taxpayers with an annual income of up to 10,000 euros, to 1100 euros for an annual income of 10,000 to 20,000 euros, to 1,400 euros for income from 20,000 to 30,000 euros, 1,800 euros for 30,000-40,000 euros and 2,200 euros for those with an income of more than 40,000 euros per year.
The annual expenses of each individual for visits to doctors, dentists, orthodontists and veterinarians, as well as for examinations at private diagnostic centers and for other medical services, except for the purchase of drugs and hospitalization, will be counted twice. An invoice of € 100 will be treated as € 200 to cover 30% of the annual real income from electronic expenses.
5. Tax lotteries
The new tax lottery is expected to premiere in January and pay the lucky taxpayers up to € 50,000, with a € 100,000 super-draw for Christmas. According to the proposed changes, every month 500 lucky people will win from 1000 euros, 70 – from 5000 euros, 5 – from 20,000 euros, and the super lucky taxpayer has a chance to win from 50,000 euros.
6. Private and corporate business
Business profits will be taxed at a reduced rate of 22% (up from 24%). A reduction in the tax advance for legal entities of up to 80% is also applied.
7. VAT rates.
Reduced VAT rates on tourism, transportation, coffee, soft drinks and cinema tickets have been extended until June 2022. Also, by the end of June, the VAT rate will be reduced from 24% to 13% for gyms, swimming pools and dance schools that are not exempt from VAT. A permanent measure is the transfer of the VAT rate on animal feed to a reduced rate of 6%.
8. Mobile telephony.
Subscription fee for mobile communication and prepayment reduced up to 10%, from 12% to 20%, which until now have been depending on the amount of the monthly bill, and canceled for young people under 29 years old.
9. Pay TV.
The reduction in fees for commercial channels will amount to 10% of the total bill and will be extended until June 2022.
10. “Green” costs.
The costs associated with promoting a green economy, energy and digitalization will be deducted from the gross income of small and medium-sized enterprises, increased by 100%.
11. Purchase of self-occupied state land
One of the most interesting bills of the Ministry of Finance, which is expected to be presented in early 2022 and will give the right to those who seized state land to buy them from the state at a price calculated on the basis of objective values of real estate with a discount rate and will scale depending on the duration of the encroachment; and the type of property. (The law is very interesting and we will talk about it later. Editor’s note).
12. Incentives for mergers and acquisitions.
Through partnership, individual entrepreneurs can create a new legal entity of a higher form for taxation on preferential terms. Legal entities that merge into a new legal entity or take over an existing one, creating significant economies of scale, will receive a 30% discount on the amount of tax due over three years. Acquisitions and mergers are one of five criteria for accessing Recovery Fund loans at a very low interest rate.
Great, isn’t it. But unfortunately, free cheese, as you know, can only be found in mousetraps. And you will have to pay for all these “indulgences”. But about this in our next publications.