The Tax Bills of Horror – 5,5 Million Greek Taxpayers Must Find and Pay 5.1 Billion Euro
Friday night and six friends sit at a grill at a nice Athens square enjoying a cheap souvlaki meal and ice-cold beers. We chat about this and that and possible vacation destinations. No, my friends most likely won’t go for vacation this summer. The tax assessment bills they received in the last days have spoiled every little mood for even a-week-long vacation away from home. And it’s not only the mood. It’s the damned shortage of money.
Eleni, married, two children, one studies in city 350 km away. While in the previous year she had 1,300 euro in tax return, this year she will have to pay €3,167 (incl. solidarity and trade tax). Her salary was cut at 35% and she had already had taxes directly deducted from her monthly salary.
“I couldn’t believe what I saw,” she said in an angry voice. “I pay rent for my boy 250 euro per month and the tax office accepted only 70 euro. That’s unacceptable!”
The biggest blow to 5,5 million Greek taxpayers came with the lowering of the tax-free income from 12,000 down to 5,000 euro created the first big hole in millions of Greek households. A difference of 7,000 euro which immediately translates 10% taxation, that is 700 euro. Right away.
Our friend Maria, pensioner, got a tax return of 35 euros in 2011. This year she has to pay 2,600 euro in taxes, even though her pension cut sharply cut and she saw Xmas & Holidays bonuses disappearing.
“I will have to borrow from my brother,” she says “or even better, I won’t pay at all.” As Maria has no property or any other assets, she is not even afraid, the tax office would confiscate anything she owes. Then she owes nothing except an old car. “They can take it, I give it as a gift to them,” she says in a nonchalant way.
Last year the Finance Ministry of the indebted country, passed a new taxation bill that except lowering the tax-free income, cancelled the majority of tax excemptions.
Tax exemptions for mortgage interest, medical expenses, rent, etc. were sharply cut. They were replaced by a flat discount only on the tax and not on the income. The discount rate was reduced from 20% to 10%.
The discounts for interest rates of mortgage loans were cut too and thus at a rate of just 10% and only for homes up to 120 sqm and loans up to 200,000 euro.
The bonus for collecting receipts disappeared and was replaced by an obligatory showing evidence of spending up to 25% of the income. These receipts do not include payments for utilities, telephone or transportation costs.
The Ministry introduced the solidarity tax of 1% to 4% for incomes of 12,000 euro to 100,000+ euro.
Not to forget the trade fee of 500 euro per year for those self-employed or employees with a second self-employed (free-lance) activity.
And as if all these were not enough, the criteria of so-called “purported” or “deemed” income were introduced. According to these, the tax office ‘judges’ each taxpayer’s income according to his ‘theoretical’ living standard.
According to this absurd measure, every taxpayer needs 3,000 euro to live within a year. Also maintenance costs of a home are translated into taxable euro depending on the square meter (for example 80/sqm for 120 sqm home). Car maintenance are translated into euro according to cc. Loans and school fees, paying for rent or for life insurance are added as well.
With these criteria of deemed income, the taxpayer’s income soon climbs soon to 12,000+ euro, whether this money entered the taxpayers pockets or not.
From daily TA NEA
“Employed, married, 2 children, annual income 32,000 euro: tax €4,575 in 2010, tax €6,930 in 2011 (for 2012 declaration)
Employed, married, three children, annual income 32,000 euro: Tax €150 in 2010, tax €5,160 in 2011.
Self-employed, single, annual income 15,000 euro: Tax €110 in 2010, tax 1,790 (incl solidarity tax 150 euro and trade fee tax 500 euro).”
Here is the nice example of a Greek homeless who would be asked to pay 116 euro in taxes, should he make the mistake and make a tax declaration.
… On Friday night we kept drinking beers and chatting. About where and when this nightmare will stop. Eleni and Maria kept swearing. Maria’s sister said nothing. She makes no tax declaration as she also owes nothing and is without job since four years. Olga and her mom said little as well. Olga works occationally and gets paid normally at a much later time. Without her mom’s pension they two woman would have to sell their home in order to survive.
PS We are all rich but we do not know it
Latest but still unconfirmed news speak of additional taxes in 2012, because of that stupid hole of 2 billion euro in the state revenues, deficit, call it whatever you want…
I hope that they won’t tax our nightmares.
Friday night and six friends sit at a grill at a nice Athens square enjoying a cheap souvlaki meal and ice-cold beers. We chat about this and that and possible vacation destinations. No, my friends most likely won’t go for vacation this summer. The tax assessment bills they received in the last days have spoiled every little mood for even a-week-long vacation away from home. And it’s not only the mood. It’s the damned shortage of money.
Eleni, married, two children, one studies in city 350 km away. While in the previous year she had 1,300 euro in tax return, this year she will have to pay €3,167 (incl. solidarity and trade tax). Her salary was cut at 35% and she had already had taxes directly deducted from her monthly salary.
“I couldn’t believe what I saw,” she said in an angry voice. “I pay rent for my boy 250 euro per month and the tax office accepted only 70 euro. That’s unacceptable!”
The biggest blow to 5,5 million Greek taxpayers came with the lowering of the tax-free income from 12,000 down to 5,000 euro created the first big hole in millions of Greek households. A difference of 7,000 euro which immediately translates 10% taxation, that is 700 euro. Right away.
Our friend Maria, pensioner, got a tax return of 35 euros in 2011. This year she has to pay 2,600 euro in taxes, even though her pension cut sharply cut and she saw Xmas & Holidays bonuses disappearing.
“I will have to borrow from my brother,” she says “or even better, I won’t pay at all.” As Maria has no property or any other assets, she is not even afraid, the tax office would confiscate anything she owes. Then she owes nothing except an old car. “They can take it, I give it as a gift to them,” she says in a nonchalant way.
Last year the Finance Ministry of the indebted country, passed a new taxation bill that except lowering the tax-free income, cancelled the majority of tax excemptions.
Tax exemptions for mortgage interest, medical expenses, rent, etc. were sharply cut. They were replaced by a flat discount only on the tax and not on the income. The discount rate was reduced from 20% to 10%.
The discounts for interest rates of mortgage loans were cut too and thus at a rate of just 10% and only for homes up to 120 sqm and loans up to 200,000 euro.
The bonus for collecting receipts disappeared and was replaced by an obligatory showing evidence of spending up to 25% of the income. These receipts do not include payments for utilities, telephone or transportation costs.
The Ministry introduced the solidarity tax of 1% to 4% for incomes of 12,000 euro to 100,000+ euro.
Not to forget the trade fee of 500 euro per year for those self-employed or employees with a second self-employed (free-lance) activity.
And as if all these were not enough, the criteria of so-called “purported” or “deemed” income were introduced. According to these, the tax office ‘judges’ each taxpayer’s income according to his ‘theoretical’ living standard.
According to this absurd measure, every taxpayer needs 3,000 euro to live within a year. Also maintenance costs of a home are translated into taxable euro depending on the square meter (for example 80/sqm for 120 sqm home). Car maintenance are translated into euro according to cc. Loans and school fees, paying for rent or for life insurance are added as well.
With these criteria of deemed income, the taxpayer’s income soon climbs soon to 12,000+ euro, whether this money entered the taxpayers pockets or not.
From daily TA NEA
“Employed, married, 2 children, annual income 32,000 euro: tax €4,575 in 2010, tax €6,930 in 2011 (for 2012 declaration)
Employed, married, three children, annual income 32,000 euro: Tax €150 in 2010, tax €5,160 in 2011.
Self-employed, single, annual income 15,000 euro: Tax €110 in 2010, tax 1,790 (incl solidarity tax 150 euro and trade fee tax 500 euro).”
Here is the nice example of a Greek homeless who would be asked to pay 116 euro in taxes, should he make the mistake and make a tax declaration.
… On Friday night we kept drinking beers and chatting. About where and when this nightmare will stop. Eleni and Maria kept swearing. Maria’s sister said nothing. She makes no tax declaration as she also owes nothing and is without job since four years. Olga and her mom said little as well. Olga works occationally and gets paid normally at a much later time. Without her mom’s pension they two woman would have to sell their home in order to survive.
PS We are all rich but we do not know it
Latest but still unconfirmed news speak of additional taxes in 2012, because of that stupid hole of 2 billion euro in the state revenues, deficit, call it whatever you want…I hope that they won’t tax our nightmares.
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