A new extraordinary taxation of 33% on the excess profits of the refineries was announced by the Minister of National Economy and Finance, Kostis Hatzidakis. The temporary emergency levy will finance the Christmas allowance to be received by pensioners with personal difference.

At the same time, it was announced that the reduced VAT rates on taxis and coffee in the hand would be permanent.

In more detail:

A. Imposition of Temporary Solidarity Contribution

Following the imposition of an extraordinary temporary solidarity contribution on the refining companies for the year 2022, an extraordinary Temporary Solidarity Contribution (P.S.A.) is established on the refining companies based on the excess profits of the fiscal year 2023.

The Temporary Solidarity Contribution will be calculated based on the excess profits of the tax year 2023, as defined by Regulation (EU) 2022/1854, i.e. 33% of the taxable profits of the year 2023, which exceed 20% of the average results of the years 2018 to 2021.

It is noted that the Temporary Solidarity Contribution, calculated on the basis of the excess profits of 2023, will be confirmed within 2024 and will be reflected in the companies’ declarations of the tax year 2024.

The income will be used mainly for the financial support for pensioners during the month of December, who due to a personal difference do not benefit from the new increase in pensions from 1/1/2025, as well as for strengthening the credits of the National Public Investment Program.

B. Fixation of reduced VAT rates

It is recalled that from 1/1/2024 the reductions in the VAT rate were made permanent in a series of goods applied during the pandemic period such as transport, gyms, dance schools, cinemas and in a series of goods related to public health with an annual cost 305 million euros.

In addition, the reduced rate on coffee, cocoa, tea and chamomile offered in restaurants and taxis was extended until 30/06/2024 with an estimated cost for the six months of 77 million euros.

In addition, the reduced rate on non-alcoholic beverages was fixed at 13% for cases that constitute deliveries of goods (take away and delivery), while on served non-alcoholic beverages it returned to 24%.

As of 1/7/2024, the reduced rate for taxis is permanent (from 24% to 13%) with an estimated annual fiscal cost of 45 million euros.

In addition, the reduced VAT rate remains (13%) on coffee, cocoa, tea and chamomile that constitute deliveries of goods (take away and delivery), with an estimated fiscal cost of 65 million per year, and returns to 24% only for served goods, proportionally with the remaining non-alcoholic beverages, with an estimated saving of 43 million per year.

The Minister of National Economy and Finance, Kostis Hatzidakis, made the following statement: “As the picture of the accounting profits of the refining companies for the year 2023 has crystallized, it is evident that these, even if partially reduced in relation to the year 2022, remain in significantly higher levels than in the pre-crisis period, signaling the existence of surplus profits. Therefore, the extraordinary levy imposed in 2022 is also imposed in 2023, as allowed by Regulation 2022/1854 of the EU issued on the occasion of the energy crisis and its effects.

These revenues will be used to meet the needs of pensioners as well as the strengthening of public investments. In addition, the reduced VAT on taxis and the delivery of coffee in the form of take away and delivery is permanent.

The government is doing its best to support, in difficult circumstances, vulnerable social groups, while achieving fiscal targets, at a time when the economies of many other EU countries are being tested.”