These taxpayers were sent their income tax returns this year by the Inland Revenue Authority fully pre-populated with all the necessary data so that they are ready for one-click submission by themselves or their accountants.
In addition, these taxpayers were also sent summary settlement notes that list all the pre-filled data of their returns, as well as the final result that will appear during the settlement of their returns, if they submit them as pre-filled.
There are two reasons why a large number of pensioners – entitled to income tax refunds appear this year:
- The fact that during 2023 the vast majority of pensioners had a total of more income tax withheld than their annual income from main and supplementary pension. This was because, for the first time, pensioners received increases of up to 7.75% in their pension amounts nominally from 1-1-2023, but effectively from March 2023, together with retroactive amounts of increases for the first two months of 2023. In that month, therefore, the calculation of the monthly income tax withholding was made on very significantly increased pension amounts, as both the increase of the month of March and the increases of the two previous months had been added to them. In particular, when calculating the monthly income tax withholding in the month of March 2023 and specifically when reducing the monthly pension to annual, in order to first calculate the withholding tax on an annual basis and then divide the annual tax by 12, to derive the monthly withholding amount, as is done every month, the following happened:
a) The amount of the monthly pension multiplied by 12 was temporarily significantly increased, because it included the retroactive increases of the two previous months.
b) This had the result, when converting the over-increased monthly pension to an annual one, that a fictitiously increased annual pension amount arose on which the non-indexed income tax scale was applied and thus resulted, temporarily for that month, in a significantly increased annual tax amount to withhold.
c) The significantly increased annual tax amount was divided by 12 to yield, respectively, a significantly increased monthly income tax amount, which was then withheld from the March pension.
d) In the following months, the amounts of monthly income tax withholdings returned to levels lower than those of March, but the sum of the 12 monthly income tax withholdings remained at a higher level than the total income tax actually attributable to the annual amount of each pension.
Essentially, that is, the temporary over-increase of the monthly amount of income tax withheld in the month of March had the consequence that the total of the monthly income tax withheld during 2023 was ultimately greater than the total of the corresponding income tax on the total pension of the year 2023 .This additional difference that arose between withheld and prorated income tax must now be returned to the pensioners by clearing their statements.
- This year, for the first time following 12 years, the Special Solidarity Contribution of article 43A of Law 4172/2013 (Income Tax Code) ceased to be certified in the income tax statements of pensioners with annual pension amounts of more than 12,000 euros, as it was completely abolished and for pensions as of 1-1-2023. Until last year, in the income tax statements for each previous tax year, this levy was charged with rates ranging from 2.2% to 10% on all pensioners with annual taxable income from pensions of the previous year greater than 12,000 euros. This resulted in almost all pension statements of pensioners with annual pension incomes of more than 12,000 euros being issued by debit until last year.
And this was because the solidarity contribution corresponding to the total income from the main and supplementary pension of more than 12,000 euros was confirmed almost entirely in the statement of each pensioner of this category, since it was not withheld from the pensions during each previous year, because in itself each main and each auxiliary pension did not exceed 12,000 euros per year.
Increased credit or zero settlements
This year’s phenomenon of the issuance of a significantly increased number of income tax settlement notes which state tax refunds – mainly to pensioners without income from other sources whose declarations are already pre-filled by the AADE and are already submitted en masse – is also reflected in the first statistics of the settlement of the this year’s declarations. According to these data, out of a total of 109,863 already submitted income tax returns for tax year 2023:
- A rate of 24.67%, which corresponds to 27,103 statements, is credit, that is, statements from which settlement statements with tax refunds arise. The total amount of refunds so far amounts to €9.85 million.
- Debit statements, i.e. those from which settlement statements with debit balances of tax to be paid arise, are for the first time less than credit statements, as they amount to 23.05% of the total or 25,323. The total amount of additional taxes to be paid as indicated in the debit notes amounts to 21.78 million euros.
- The zero declarations, i.e. those from which settlements with zero tax balances result, are also increased, as they amount to 52.29% of the total or 57,447.
It is worth noting that last year, out of a total of 6.6 million submitted statements, credit notes covered only 16% of the total, debit notes were more than double the credit notes, as they covered 36.19% of the total, and zeros were fewer, as covered 47.81% of all declarations.
FOR PROPERTY TRANSFERS
“Dichotomy” AADE and notaries
Real estate is getting more and more expensive, but how many are buying? It is of great interest to compare the data from the AADE, the market prices and what contracts the notaries see in their offices. The latter are seeing a significant drop in sales. Mr. Giorgos Rouskas, president of the Notarial Association of Greece, has recently stated that “from Christmas until now, real estate transfers have decreased by 25% to 30%, a percentage, however, that will increase even more, due to the changes to the Golden Visa”.
Now, the procedures are increasingly done electronically and we can see the overall data, as announced by AADE. It is typical that last year we had a record in electronic transfer declarations, where an increase of 73.5% was recorded. This year, the data from myProperty paints a completely different picture, as transfers are not just sales. Since the beginning of the year, more than 135,000 declarations have been submitted, with taxes ascertained exceeding €200 million.
According to the AADE, since the beginning of the year approximately 61,000 transfer tax statements from real estate sales, 31,000 electronic inheritance tax statements, 27,000 parental benefit tax statements and 17,000 donation statements have been submitted to the electronic platform. Last year we had record transfers, with over 400,000 declarations for sales, parental benefits, donations and inheritances on the myProperty online platform. Tax receipts reached 761 million euros from 710.10 million euros in 2022, while for this year they are estimated to exceed 800 million euros.
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