Increasing non-taxable allowance for families with children

The government announced tax breaks for families with children and freelancers. The authorities are introducing a system of facilitating the taxation of average incomes in terms of a more equitable distribution of the tax burden. In addition, the goal is to combat tax evasion and support investment.

As the commission recommends broadening the tax base and strengthening tax compliance for the self-employed, the new government is expected to implement tax reform.

It will include reliefs such as: an increase in the tax-free threshold of 1,000 euros for families with children, changes in the tax regime for professionals (self-employed freelancers), as well as others, which will be gradually activated over the next four years.

According to the newspaper Ta Nea, it is generally accepted that the tax system needs to be improved in order to facilitate average incomes, share the tax burden more fairly, combat tax evasion, combat competition from neighboring countries and support investment.

In this context, new the economic headquarters, which will appear after the elections on June 25, will be engaged in the reform of the tax system by preparing a new billwhich, among other things, will include:

1. Increasing the non-taxable minimum for families with children. From January 1, 2024, the tax-free threshold for more than 700,000 employees, pensioners and professional farmers will increase by 1,000 euros. This means that families with 1 child will receive a tax credit of 90 euros per year, and for taxpayers with two or more protected children, the tax credit will increase to 220 euros.

With an increase of 1,000 euros, the non-taxable limit for employees, pensioners and professional farmers is set at:

• €10,000 of the €9,000 that applies today for taxpayers with a dependent child.
• €11,000 out of €10,000 for taxpayers with two children.
• €12,000 out of €11,000 for those with three dependent children.
• €13,000 out of €12,000 for taxpayers with four dependent children.
• For taxpayers without children, the tax-free limit remains at 8,636 euros.

2. Changes in the tax status of freelancers.
Commission calls on the government to change self-employed tax system and use electronic payment data to limit tax evasion in this area. In fact, she cites data for 2021, according to which more than 67% of the self-employed declared an income of less than 10,000 euros. Total reported revenue was 4.2 billion euros against sales of 48.6 billion euros. It is expected that the IOBE study, which includes proposals and measures taken by other European countries, will become a guide for professionals on changes in the tax system.

3. Changes in tax incentives for electronic transactions and the expansion of POS terminals to all types of economic activity. The goal is to sharply limit the use of cash in the daily financial transactions of taxpayersand oblige businesses to spend most of their daily turnover through POS-terminals or other means of electronic payments.

4. Tax incentives. The “newly minted” economic staff is expected to consider draft tax credits and deductions that apply today to the self-employed, small and medium-sized enterprises, as well as another 1047 categories of expenses that reduce tax or provide full exemption. In this context, all tax credits will be reviewed and taken into account to determine their component for the budget and categories of recipients will be approved.

According to budget data, the number of tax incentives currently stands at 1,047, and their budgetary value reaches 12.88 billion euros.

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