A 3% tax discount will be earned by taxpayers who choose to pay the income tax resulting from the settlement of the tax return in one lump sum by July 31, 2023, instead of in 8 equal monthly installments.
In particular, in an amendment of the Ministry of Finance submitted to the Parliament, it is foreseen that the payment of the income tax, which will result from the settlement of the tax return in 8 equal monthly installments, while if the taxpayers choose to pay the amount in one lump sum until July 31, 2023 will have a 3% discount
At the same time, the same amendment provides for the taxation of MEPs’ compensation and pensions.
With an amendment submitted to the multi-legislation of the Ministry of Finance, among others, the following provisions are proposed:
1. The gross income from salaried work and pensions includes the compensations and pensions, which the MEPs receive.
2. a. The income tax for fiscal year 2022 of legal entities/entities and natural persons is paid, in eight (8) equal monthly installments, as specifically defined.
b. A three percent (3%) discount is provided in the event of a one-off payment of the personal income tax by 31.07.2023 on the total amount of the tax and the debts due to it.
The new provisions
Article 1
Taxation of allowances and pensions of Greek MEPs – Addition of par. 4 to article 12 of the Income Tax Code
1. Paragraph 4 is added to article 12 of the Income Tax Code (law 4172/2013, A’ 167) on the taxation of the compensations and pensions received by MEPs, as follows:
“4. The gross income from salaried work and pensions also includes the compensations and pensions, which the MEPs of Greece receive, pursuant to article 9 of the decision 2005/684/EC of the European Parliament.”
2. Paragraph 1 applies from the tax year 2022 onwards.
Article 2
Arrangements for payment of installments for the income tax of the tax year 2022 – Addition of par. 85 and 86 to article 72 of Law 4172/2013
Paragraphs 85 and 86 are added to article 72 of the Income Tax Code (law 4172/2013, A’ 167), as follows:
“85. The payment of the income tax of legal persons and legal entities for the income of the tax year 2022, with the exception of legal persons and legal entities, which have been dissolved or have been placed in liquidation, is carried out in eight (8) equal monthly installments, from of which the first is paid until the last working day of the following month from the final date of submission of the declaration, based on par. 2 of article 68 and the remaining seven (7) until the last working day of the following seven (7) months.
86. The payment of the personal income tax of the tax year 2022 is made in eight (8) equal monthly installments, of which the first is paid until July 31, 2023 and each of the following until the last working day of the seven (7 ) of the following months. The payment of the tax, determined by declarations of taxpayers participating in legal entities and legal entities that keep aplographic books, is made in six (6) equal monthly installments, of which the first is paid until the last working day of the month of September 2023 and the each of the following until the last working day of the following five (5) months.
When the tax due on the basis of the timely declaration is paid in one lump sum until July 31, 2023, a discount of three percent (3%) is provided on the total amount of the tax and the related debts.
This does not apply to natural persons who have been subject to the alternative income taxation of article 5B.”
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**Interview with Tax Policy Expert Dr. Anastasia Papadopoulos on Recent Tax Amendments**
*Interviewer*: Thank you for joining us today, Dr. Papadopoulos. There has been some recent news about tax amendments proposed by the Ministry of Finance. Can you explain the main points regarding the 3% tax discount for lump sum payments?
*Dr. Papadopoulos*: Of course! The recent amendment allows taxpayers to receive a 3% discount on their income tax if they pay the total amount in one lump sum by July 31, 2023, rather than in eight monthly installments. This is aimed at encouraging early payment and reducing administrative burdens on the tax authorities.
*Interviewer*: That’s interesting. What impact do you think this will have on taxpayers?
*Dr. Papadopoulos*: For many taxpayers, especially those with tighter cash flows, the option to pay in installments may be more manageable. However, the 3% discount could incentivize those who can afford it to pay in full to save some money. It essentially promotes fiscal responsibility and might also help the government manage its cash flow better.
*Interviewer*: This amendment also mentions the taxation of MEPs’ compensation and pensions. How significant is this change?
*Dr. Papadopoulos*: This is quite significant as it marks a shift towards greater equity in the taxation system. Including MEPs’ compensations and pensions in the taxable income means that these officials will contribute fairly to public finances just like any other citizens. It’s a move aimed at increasing transparency and accountability in public service.
*Interviewer*: There are provisions for both individuals and entities regarding their income tax payments. Can you provide a brief overview of those?
*Dr. Papadopoulos*: Yes, the amendment stipulates that the income tax for the year 2022 is to be paid in eight equal installments. However, as I mentioned earlier, there is a financial incentive to encourage taxpayers to opt for one-time payments by the end of July. This could bolster public revenue in the short term.
*Interviewer*: what do you think will be the overall implications of these amendments for taxpayers moving forward?
*Dr. Papadopoulos*: These amendments could reshape taxpayer behavior significantly. The combination of discounts for lump sum payments and the inclusion of MEP compensations in taxable income may foster a more responsible and fair tax system. It remains to be seen how taxpayers will respond, but it could lead to enhanced compliance and an improved relationship between the public and tax authorities.
*Interviewer*: Thank you, Dr. Papadopoulos, for your insights on these important tax changes.
*Dr. Papadopoulos*: Thank you for having me!