In analysis of the tax bill which was presented to the Council of Ministers, the Minister of National Economy and Finance advanced this afternoon Kostis Hatzidakis and the competent Deputy Minister Haris Theocharis.

Starting the interview, Mr. Hatzidakis asked himself a question “why a new taxation system?». “Because 71% declared in 2022 an annual income lower than that of my wage earner is paid the minimum wage. Why 4% of Freelancers Pay 50% of the Industry’s Taxes”he replied.

As he said, “no freelancer will be allowed to be taxed on an income lower than that of an employee who is paid the minimum wage. This presumption will be rebuttable”, he emphasized.

He added that from 2024 freelancers and the self-employed will have a reference point for their presumptive income, which cannot be lower than the basic salary. The amount of the presumption for freelancers and the self-employed is 10,920 euros. This will be increased based on years of operation, industry average turnover and staff remuneration.

According to Mr. Hatzidakis, for those who declare higher taxable profits above the minimum presumptive ones, a 50% reduction in the pretense fee is foreseen in 2024 compared to 25% for the rest. The correct implementation of the measure will bring an additional 600 million euros to the budget. Only 24% of taxpayers are estimated to pay more than 3,000 euros a year. The vast majority of freelancers will pay between zero and €3,000 in tax, he noted.

Kostis Hatzidakis underlined that “increases in taxes will be seen by those who presumably did not declare their incomes”. Regarding the expected results from the new tax bill, the minister noted:

“A much fairer taxation system” and “gradual and faster abolition of the pre-employment tax and with the additional resources we have the possibility to strengthen education and health” concluded Kostis Hatzidakis.

With the implementation of the new system, thousands of self-employed professionals will lose benefits totaling 100 million euros which will be returned to society either by increasing the benefits or the beneficiaries

The bill moves along five axes:

1. The use of new technologies. I want to underline the unwavering will to connect POS to cash registers.
2. Limiting the use of cash in transactions.
3. More transparent and effective controls.
4. Intervention in short-term leases.
5. Fair system of taxation of freelancers

Kostis Hatzidakis briefly repeated the 10 measures against tax evasionwhich are included in the tax bill:

1. Interconnection of cash registers with POS in the first months of 2024 (applies to approximately 450,000 businesses).
2. By 2024, electronic invoices are mandatory, so that transactions can be cross-referenced and verified in real time.
3. Universal electronic books (myDATA). This means that the income declared cannot be less than that resulting from the electronic information (myDATA, cash-POS). Also, only those that have been transmitted electronically to myDATA will be counted as expense invoices for tax purposes.
4. POS everywhere in a short time.
5. The digital consignment note is activated (pilot from the beginning of 2024 and fully before the end of the same year), with the aim of real-time monitoring of goods in transit.
6. The fine for using cash over 500 euros is increased, to an amount twice the amount of the transaction.
7. The payment of the majority of social and welfare benefits (child benefits, birth benefits, unemployment benefits) through debit cards is instituted. Combined with the interconnection of cash registers with POS, the measure excludes the channeling of allowances to the underground economy.
8. Smuggling offenders are excluded through the creation of a register of offenders and the prohibition of cooperation with smuggling offenders.
9. Buying and selling real estate with cash is prohibited.
10. From 01/01/2024, VAT and accommodation tax – currently valid for hotels and rooms for rent – is imposed on the income from short-term rental of three or more properties, Airbnb type.

For his part, the Deputy Minister, Haris Theocharis referred to the initiatives to limit the use of cash.

According to the deputy minister, it is about:

– Obligation to buy and sell real estate with bank payment methods only.

-Payment of allowances via debit card.

-Strict penalties for transactions over 500 euros.

-Compulsory business-to-business transactions for consumer-related products.

About the obligation buying and selling real estate Mr. Theoharis argued that “it will be considered that the contract that has a partial or total payment of the price in cash, will be considered invalid and its transfer will be prohibited, while a fine will also be imposed”.

At the same time, he announced the intervention for short-term leases, for which – among other things – it is planned to replace the accommodation tax with a climate crisis resilience fee. The Climate Crisis Resilience Fund will be financed from this amount.

Regarding the self-employed tax evasion pointed out that “constitutes a double message of injustice, against employees and pensioners on the one hand”, and “within the ranks of the self-employed on the other”, as the burden of taxation falls disproportionately on the backs of the few.

According to Mr. Theoharis “the main axis of the new system is that the accounting profits of a company cannot be less than the calculation based on objective and fixed criteria”.

“Scope of application is individual businesses excluding farmers and “blokakaki” who are undercover employees,” he added.

The determination of the minimum wage will be done as follows:

– It cannot fall short of the highest of the minimum basic salary with an increase after the sixth year.

-The remuneration of its employees will be taken into account.