Will the reduced VAT rates on transport, coffee, and tour packages be extended?

The onset of the pandemic and quarantine led to a reduction in VAT rates on transport, coffee and soft drinks, theater and cinema tickets, gyms, and tourist packages.

The measure, first activated in 2020 to support households and businesses, remained in place during the energy crisis and expires on December 31, 2023. If there is no new extension of the measure, from January 1, 2024, VAT rates on some services and goods will return to their previous level (2 times higher).

This measure expires on December 31, 2023. High budgetary costs and considered scenarios.

According to available data, the leadership of the Ministry of Finance is studying this issue, not excluding the possibility of a further extension, since the rise in prices for food and fuel continues, which has sharply reduced the real incomes of citizens. At the same time, the budget took a big hit from Cyclone Daniel, as the cost of assistance and compensation to residents of the affected areas already exceeds 1 billion euros. The Ministry of Economy and Finance is assessing financial stability and is looking for funds to extend the reduced VAT rates. The cost of the measure is high, amounting to €250 million over six months, with final decisions to be “locked in” until the final draft budget for 2024 is presented.

Today, the basic VAT rate in Greece is 24% – this is one of the highest rates in the world. EU.

What is true today? The reduced VAT is valid until the end of the year:

• Transport: reduced VAT of 13% applies to tickets for trains, metro and trams, city and intercity buses, air tickets, tickets for passenger ships, as well as combined road, air and sea transport.
• Tourist package.
• Catering: reduced VAT of 13% applies to coffee, drinks (tea, chocolate, etc.) and soft drinks served by catering establishments.
• Coffee and soft drinks.
• Tickets to cinemas and theaters, where 6% VAT applies.
• Tickets to the zoo.
• In gyms, swimming pools and dance schools that are not exempt from VAT.
• When importing and delivering art objects.
• In a number of healthcare-related products (i.e. protective masks and gloves, antiseptics, solutions for disinfecting premises, etc.), as well as in some medical materials necessary for hemodialysis, such as filters for hemodialysis and hemofiltration, defibrillators.

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