As previously reported, on 11 January 2013, the Greek Parliament adopted a new tax law.

The key tax measures with regard to individual taxation, which generally apply from 1 January 2013, are summarized below.

Introduction of two separate tax schedules as follows:

a) Individuals earning employment or pension income

b) Individuals earning income other than employment or pension income (e.g., liberal professions)For new professionals starting their activity from 1 January 2013, the tax rate of the first bracket (26%) is decreased by 50% and up to €10,000 income for the first three years of activity.

Abolition of the tax-free bracket for both above categories of taxable income.

Introduction of a new tax deduction of €2,100 for individuals earning up to €21,000 employment or pension income. For employment or pension income above €21,000, a tax deduction of €100 per €1,000 of income may be granted until the ceiling of €2,100 is reached. In order to claim this deduction, individuals must collect receipts with regard to the living expenses equivalent to 25% of their taxable income. The value of receipts collected may not exceed €10,500. If, however, the value of the collected receipts does not reach the 25% requirement, a 22% additional tax is levied on the difference between the value of collected receipts and the required amount (up to €10,500).

Abolition of tax-free brackets for dependent children and substitution with special allowances as follows:
a) €40 per month for each one of the first two dependent children, irrespective of the total taxable income
b) €500 per year for each additional child for family taxable income up to €45,000

Introduction of a tax deduction of €200 for each disabled dependent.

Introduction of a special tax schedule for income from rental of immovable property or from movable assets that are not taxed under special provisions with extinction of tax liability, as follows:

In addition, 1.5% surtax is imposed on gross rental income from immovable property, increased to 3% if it concerns either dwellings whose area exceeds 300 m2 or professional lease.

Increase of the withholding tax rate on interest to 15% (currently 10%).

Decrease of the withholding tax rate on dividends to 10% (currently 25%).

Introduction of a 20% final withholding tax on the capital gains derived from the sale of shares in an unquoted corporation (AE) (currently 5% upon the sale of shares).

Special provisions are introduced with regard to the calculation of capital gains in this case.

Introduction of a 20% final withholding tax on the capital gains derived from the sale of shares listed on the Athens Stock Exchange that are acquired from 1 July 2013 onward.

Introduction of a 20% capital gains tax on the gains from the sale of immovable property after 1 January 2013, with extinction of the tax liability. Special provisions are introduced with regard to the calculation of the capital gains in this case.

Increase of the special annual entrepreneurial levy for professionals (accountants, doctors, lawyers etc.) and individuals carrying on business to €650.

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