Tax & Accounting Blog

Greece Stability Agreement Update

Blog, Indirect Tax, ONESOURCE, VAT Tax Rates July 16, 2015

On July 12 2015, the European Council (comprised of the heads of state of European Union Member States) released a statement on the Euro Summit related to the ongoing negotiations surrounding Greece’s debt crisis. The announcement follows an agreement among Member State heads of state (being called the “Agreekment” in media outlets).

The negotiations culminated with the representatives from Greece agreeing to a number of measures, fulfillment of which would permit the discussion of further emergency financial assistance for Greece under the European Stability Mechanism. The measures to be implemented reach widely across the financial sector, including measures to reform the pension system, adopt the Code of Civil Procedure, de-politicize the Greek financial administration apparatus, privatize energy, and comply with previous measures implemented to stabilize the Greek economy.

Thomson Reuters Tax and Accounting has been closely following developments regarding the Greek financial crisis which relate to Indirect Tax, in support of ONESOURCE Indirect Tax technology, which assists with Determination. The first set of measures was approved by the Greek Parliament on July 15 2015.

The exact text of the Greek parliament action is not yet available, but Greece met the deadlines for the first round of measures. There is no stated implementation date for changes to the Value Added Tax system at this time. Further measures must be approved by July 22, 2015. The other member states must now approve the agreement and most member states waited for the Greek Parliament to vote before voting themselves. France was a notable exception, approving the deal hours before the Greek vote started.

Thomson Reuters Tax and Accounting will continue to closely monitor this topic, and provide appropriate updates to our customers.

Greece has a standard rate of 23% and reduced rates of 13% and 6.5%. The departments of Lesbos, Chios, Samos, the Dodecanese and the Cyclades, and on the Aegean islands of Thassos, the Northern Sporades, Samothrace and Skiros the standard rate is 16% and the reduced rates are 9% and 5%.