How will we be taxed in 2023?

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The biggest change in the way of taxation in 2023 is that the reduction of taxable income up to €5,000 makes its appearance for the first time

By Chrysostomos Tsoufis

2023 is the year in which the solidarity levy goes down in history as it is abolished for all.

So the tax returns to be submitted for the 2022 incomes will be the last settlement for civil servants and pensioners.

The biggest change in taxation in 2023 is the introduction for the first time of a reduction in taxable income of up to €5,000, which can lead to a tax reduction of up to €2,200 for those with income from wages, pensions, business activity and real estate.

In order to reap the tax bonus, within 2022, one must have made e-expenditures in professions that are on the list of those that do not…usually issue receipts such as veterinary services, plumbing, refrigeration, heating maintenance, electrician, carpentry, insulation , masonry, plastering, tiling, roofing and sheet metal windows etc, concrete, taxi services, hairdressers, barbers and beauty shops, funeral services, massage, physical wellness, cleaning and domestic services, photo development, dance schools, gyms and leisure activities with subscription, various leisure services, personal care and nursing (excluding hospital activities), legal services and childcare services.

The law provides that 30% of such expenses are deducted from taxable income, so in order to reduce one’s taxable income by €5,000, one must have spent €16,667 in the above categories.

The maximum profit of €2,200 concerns taxpayers with high incomes above €40,000 for the maximum rate of 44% to apply and is limited accordingly for lower declared incomes. For example, an annual income of €10,000 corresponds to a tax deduction of €450 and for €30,000 the tax deduction reaches €1,400.

The method of taxation of income tax does not change:

  • 9% for the first €10,000
  • 22% for incomes of €10,001-€20,000
  • 28% for incomes of €20,001-€30,000
  • 36% for incomes of €30,001-40,000
  • 44% for incomes over €40,001

The resulting tax is reduced by:

  • €777 for singles
  • €810 for the taxpayer with one child
  • €900 for the taxpayer with 2 children
  • €1,120 for the taxpayer with 3 children
  • €1,340 for the taxpayer with 4 legs.
  • +€220 for each child after the 4th.

Businesses are taxed at a rate of 22% and advance tax varies from 55%-100%. For natural persons with business activity the advance tax is 55%, for legal persons and legal entities 80% and for banks 100%.

Advance tax is halved when a declaration is submitted for the first time by a natural person who obtains income from business activity.

Income from real estate – without any business activity – is taxed according to the following scale:

  • 15% for the first €12,000
  • 35% for incomes of €12,001-35,000
  • 45% for incomes over €35,000

*after deducting a 5% recognized as an expense for repair, maintenance, renovation and other operational needs of the rental properties.

  • Dividends are now taxed at 5%

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