Greece raises VAT rate to 24% 1st June 2016
Greece will raise its VAT rate from 23% to 24% on 1 June 2016.
UPDATE: this was approved by the Greek Parliament on 22 May 2016 [Public Revenue Authority Circular POL 1061].
The rise will generate between €400m and €500m, and help meet a gap in the 2017-18 budget forecast. It will also help avoid a potential VAT rise in domestic electricity, water and private education. There are no changes to the current 13% and 6% reduced and super-reduced rates, respectively.
The 30% reduction in VAT rate for many holiday islands is to be withdrawn, too. This will affect: Syros, Thasos, Andros, Tinos, Karpathos, Milos, Skyros, Alonnisos, Kea, Antiparos and Sifnos. This leaves a further group of island still on the 30% reduction of the standard, reduced and super-reduced rates.
The rise has been proposed to Greece quartet of institutional creditors, including: the European Central Bank; European Commission (representing EU member states); European Stability Mechanism; and the International Monetary Fund.
Greece originally raised its standard VAT rate twice in 2010, from 19% to the current 23%. It also had to push through three other reduced VAT rises recently – so making June’s VAT rise the sixth increase.