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Greece Releases Updated Tax Form E1 with Significant Changes for 2024
Over 6.6 million Greek taxpayers face the annual tax deadline with a revised E1 form including tax breaks for reopened/rented properties, shifted rentals, tips, and reduced imputed income for professionals, while the business tax is abolished. Taxpayers with a payable balance can pay in 8 installments or in a lump sum by July 31st with discounts from 2% to 4%.
- What immediate impacts will the revised Greek tax form E1 have on taxpayers and the tax authority?
- The Greek tax authority (AADE) released the updated tax form E1 for 2024, incorporating tax breaks for reopened and rented properties, properties shifting from short-term to long-term rentals, employees receiving tips, and professionals qualifying for a 50% reduction in imputed income. Taxpayers with a payable balance can pay in eight installments or in a lump sum by July 31st, with discounts ranging from 2% to 4% depending on submission timing. The final tax notice will only include income and luxury tax calculations, as the business tax has been permanently abolished for individuals.
- How do the new tax breaks for properties and tips aim to influence economic activity and taxpayer behavior?
- These changes aim to simplify the tax system and provide relief to certain taxpayers. The elimination of the business tax streamlines the process, while new provisions offer incentives for property owners to transition to long-term rentals and incentivize reporting of tips received by employees. These measures suggest a broader government strategy to modernize tax collection and stimulate economic activity.
- What are the potential long-term consequences and challenges arising from the changes implemented in the Greek tax system?
- Looking ahead, the success of these measures will depend on their effective implementation and compliance. The 2%-4% discount for early filing might encourage timely submissions, increasing efficiency for the AADE. However, the effectiveness of the incentives for property owners and tip reporting remains to be seen, requiring ongoing monitoring and evaluation. The elimination of the business tax could be a significant factor driving future tax policy decisions in Greece.
Sustainable Development Goals
The tax reforms aim to alleviate the tax burden on specific groups, such as those with low incomes or those renting out properties, thereby potentially reducing income inequality. The tax break for those renting out properties incentivizes a shift from short-term to long-term rentals, which can increase housing affordability and reduce pressure on the rental market, contributing to reduced inequality in access to housing. The changes related to tips aim to ensure fair compensation for workers, particularly those in sectors with low pay and a history of underreporting tips.