Greek Tax Trap changes

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Carolina
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Greek Tax Trap changes

Postby Carolina » Sun Apr 07, 2013 9:49 pm

(Do we really care about the UK benefits system and bedroom tax? How many of us living in Greece does it affect? Oh,.. none.)

Now here's something that we should all be discussing if we want to talk 'taxes', this is much more outrageous than any cut in UK 'benefits':


Overtaxing even zero-euro income with ‘deemed income criteria


A shock is awaiting 2,400,000 Greek taxpayers with annual real income between zero and 5,000 euro (mainly unemployed and pensioners). This year, they will have to pay tax even if they have no income at all. The tax law applied this year for the income of 2012, will be based on so-called “deem income criteria.” According to this Troika-imposed austerity measure, regardless of the actual income, every taxpayer is “charged” with a presumptive income of minimum 3,000 euro per year to cover living needs. In addition, another “presumptive income” is calculated by the tax authorities, if the taxpayer owns the home he lives in or a car. Greek finance ministry will tax presuming the owner needs several hundred euro per year for maintenance.

So pensioners and even long-term unemployed who own a property will have to pay taxes as the minimum ‘deemed income” - calculated at 6,200 euro if they own a small home (3,000 for 'deemed' living expenses and 3,200 euro 'deemed' maintenence of a small house ) even if they have zero income. The tax free allowance is 5,000 euros so they will pay 10% tax on the additional 1,200 euros 'deemed income'. More if they own a car as well.

So low incomers and unemployed will be called to pay taxes for incomes they don’t have, and the Greek tax office will not accept that one is borrowing money from relatives and friends to survive.

www.keeptalkinggreece.com/2013/04/06/gr ... e-criteria

Really, this is contemptible.

Carolina
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Postby Carolina » Sun Apr 07, 2013 9:56 pm

I'll just add here that long term unemployed in Greece get absolutely no social security benefits once their unemployment benefit has run out. Unemployment benefit usually lasts for 11 months and is only for those who have been in full time employment for at least the previous two years.

There are no other benefits for them: no social security, no housing benefit. NOTHING. And now they will have to pay taxes even though they have NOTHING but what the government deems them to need to live on (which does not exist!).

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Postby Clio » Sun Apr 07, 2013 11:38 pm

Do we really care about the UK benefits system and bedroom tax? How many of us living in Greece does it affect?


Thanks Carol and hear hear hear. I don't mean to be rude to fellow posters, and of course I’m free to ignore the many Anglocentric threads here, but I find it depressing that people for whom this is their adopted country, who are living surrounded by hardship and distress, can find nothing better to talk about than whether Margaret Thatcher made the trains run on time.

Even before this latest tax outrage, how can we not want to express fellow feeling for decent people who are being crushed by the impossibility of making ends meet under the austerity measures? Not sympathise with the destruction of dreams, the waste of potential, among the coming generation?

All that chat about how much you simply have to have in order to live the good life here...how do you think that would sound to the Greek down the road?

To the young couple who simply can't afford a much-wanted baby. To the bright teenager who dreamed of becoming a doctor but whose parents can barely feed her, let alone send her to university. To the teachers handing out yesterday's bread, donated by the village bakery, to children who come to school hungry. To the mother of two, with a sick husband, whose 18 hours of skivvying per week, at 2.50 an hour, is the only income they have. I could go on, and on, with true-life examples.

This is happening right now not just in faraway Athens but in Crete. These people are our friends and neighbours, and it would have been nice, these past weeks, to read the odd message of solidarity to offset the comfortable insularity of the debate here.

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Postby Kilkis » Mon Apr 08, 2013 12:04 am

While I agree that this is totally ludicrous I think it is a bit disingenuous for the author of the article to blame this on the Troika. Greece has had a system of presumed income for as long as I have lived in Greece. It was not introduced at the demand of the Troika. It was certainly modified in the last few years, in particular so that items which had an associated presumed income became accumulative rather than basing it on the single biggest item and adding a threshold. As far as I can see this was done because the Greek tax authority is completely incompetent when it comes to collecting tax and has no plans whatsoever to improve their level of competence.

The Troika certainly insisted on increasing the taxes collected but it was the Greek government who decided to do that by robbing the poorest in society, as is being done in most other countries, rather than trying to collect unpaid taxes from the richest who happen to be their supporters and bank-rollers.

Greece had a massive deficit, which over time accumulated a massive debt, because it grew its public service to an unsustainable level. The one thing the government is studiously avoiding doing at all costs is reducing the size of the public service. Despite the article in the constitution which guarantees the jobs of people who have been in public service for more than two years they could still reduce the numbers if they chose.

In theory Greece has a system of using objective assessment, i.e. exams, to decide who to appoint. In reality the results of the exams are largely ignored and people who have the right contacts are appointed. These people have been appointed illegally. The people who should have been appointed, i.e. got the best results in the exams, are a matter of public record. Start from today and work back through every public appointment. Check the names of those who were appointed against those who should have been. Sack immediately all those who were appointed illegally and the person/people responsible for making those illegal appointments. That should make a significant dent in the numbers. I don't see how someone who was appointed illegally could appeal to the constitution.

Warwick

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Postby altohb » Mon Apr 08, 2013 7:46 am

Clio wrote:
Do we really care about the UK benefits system and bedroom tax? How many of us living in Greece does it affect?


Thanks Carol and hear hear hear. I don't mean to be rude to fellow posters, and of course I’m free to ignore the many Anglocentric threads here, but I find it depressing that people for whom this is their adopted country, who are living surrounded by hardship and distress, can find nothing better to talk about than whether Margaret Thatcher made the trains run on time.

Even before this latest tax outrage, how can we not want to express fellow feeling for decent people who are being crushed by the impossibility of making ends meet under the austerity measures? Not sympathise with the destruction of dreams, the waste of potential, among the coming generation?



This is happening right now not just in faraway Athens but in Crete. These people are our friends and neighbours, and it would have been nice, these past weeks, to read the odd message of solidarity to offset the comfortable insularity of the debate here.


I quite agree, Clio - there are many people in this area surviving on food donations as there are in yours. The imposition of the "imputed income" tax would be a sick joke if it wasn't so serious for so many people. Even leaving aside the humanitarian angle, however, it has always struck me as utter madness to attempt to tax people on money which they do not possess - it is completely pointless. I was taxed on "imputed income" last year and will be again this year, no doubt - I have no income at all. My husband has an occupational pension and we have interest on our savings - that's it. We live frugally, well below the level that "they" think is appropriate for the size of our house/car, but I am taxed on nothing, like so many people in the same or worse position.

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Postby fuzer » Mon Apr 08, 2013 8:41 am

So the fact that I and others occasionally debate Thatcher - Blair and life in general on this or any other website is implicit of a detachment from my actual day to day life and experiences, according to Clio, just does not stand up to scrutiny.
I see debating Thatcher as no different to other users debating the weather or food.
Such debates have compared and aroused the national and international economic issues and how we as workers/former workers have been ripped off by the political elite. hence the Credit Crunch - austerity measures are the focal point of said debates.
I would personally love to be able to march upon the Athens Parliament building and throw stones at the windows but I know if the Police "feel my collar" I will be shipped back to UK.
I spend my money (as do my UK friends) in the local shops and Tavernas, tiny little village businesses, I have the option of moving back to UK but I choose to stay.
ALWAYS FINISH WHAT YOU STAR

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Postby Topdriller » Mon Apr 08, 2013 9:48 am

Since most ex-pat folk living here depend on a pension and / or savings the increase in the State pension and the tax threshold might well be of interest, particularly to those living on £20,000 a year!

And dear, dear, if we can't talk, discuss more than just the price of heating oil or shampoo in Greece then why not just have a frontal lobotomy and be done with it?

Some of the more astute readers might see the parallels between the Britain of the seventies and the Greece of today. Up to its ears in debt, services breaking down, militant unions, closed shops, the rich elite, the working man trying to fight the Government over wage cuts, unpopular and in some cases iniquitous taxes etc.

But Clio's right, why talk about the past in other countries; in fact why try to learn from history at all?

Jon
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Postby filippos » Mon Apr 08, 2013 1:58 pm

Topdriller wrote:Since most ex-pat folk living here depend on a pension and / or savings the increase in the State pension and the tax threshold might well be of interest...
I agree up to there, but even so, only up to a point as, personally, I don't pay UK tax.

I see no point in cluttering acres of forum real estate with stuff like the so called bedroom tax which isn't likely to affect anyone here, nor even anyone planning a return to the UK. Were it possible for a level of interest to be less than zero that's where mine would be with stuff like that.

Oh, what's the site and forum title?

I'm off now to get back below the parapet.

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Postby Kilkis » Mon Apr 08, 2013 2:36 pm

filippos wrote:...I'm off now to get back below the parapet.


That won't work. Someone will just lob a hand-grenade over the top. It's better to keep you head above the parapet. At least then you can see who is shooting at you.

Warwick

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Postby Jean » Mon Apr 08, 2013 2:56 pm

Since most ex-pat folk living here depend on a pension and / or savings the increase in the State pension and the tax threshold might well be of interest

Maybe the ones you know but there are far more expats living in Crete that are a) not Brits b) not retired.

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Postby Topdriller » Mon Apr 08, 2013 3:25 pm

It might also be of help to the estimated 30% of Cretan ex-pat residents currently trying to sell their Cretan idylls so they can return to the UK!

Jon
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Topdriller
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Postby Topdriller » Mon Apr 08, 2013 3:47 pm

By the way, I don't go to table top sales, save donkeys or pick strays up and try and re house them. But then again, neither do I complain when others post on here re all of the above. It's horses for courses - as it should be - or perhaps that should read donkeys?

Jon
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Carolina
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Postby Carolina » Mon Apr 08, 2013 3:49 pm

filippos wrote:
I see no point in cluttering acres of forum real estate with stuff like the so called bedroom tax which isn't likely to affect anyone here, nor even anyone planning a return to the UK.

Oh, what's the site and forum title?


This is really my point. And it seems that every attempt at a discussion on Greek economy / politics / taxes /austerity becomes a discussion about the UK; yes perhaps parallels are drawn at the beginning of these discussions but inevitably these threads end up taking on a life of their own and end up as Thatcher vs unions bashing or, more recently, about UK benefits.

I also don't agree that most of the expats living here depend on a pension or savings - most of the people I know are in their 40's and 50's, both singles and married with families and young teenage or young adult children, many of whom are struggling with wage cuts or unemployment.

An afterthought to the original post: Those unemployed or Greek pensioners who are living off their savings are now being taxed again on those savings - the bank deposit account tax is here.

Kilkis
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Postby Kilkis » Mon Apr 08, 2013 4:05 pm

I seemed to recall that when the concept of assessing tax on the basis of presumed income was challenged in the court, the court ruled that it was legal BUT it could not be used to tax imaginary income. I'm not sure how you distinguish but I can think of examples that might help.

If someone is working, perhaps self employed, and is declaring an income significantly less than his/her presumed income then it might be reasonable to assume that he/she is under declaring his actual income.

If, however, someone has worked for a number of years, made savings that are consistent with his/her income over those years, has lost his or her job and now claims that he/she is living on those savings then I think the tax authority should be made to prove that they are not.

Just a thought.

Warwick

PS With reference to the original post the government had a choice. If the Troika demanded that it increase the tax take by say 1 billion Euro it could have tried to get the millions in tax each owed by a few hundred individuals. It chose not to. Instead it chose to take a few hundred Euro off millions of the poorest. I wonder why? Could it be that the few hundred who owe millions each are the ones who pay into their election funds and pay the large bribes to get government contracts or other favours?

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Postby Topdriller » Mon Apr 08, 2013 4:07 pm

Sadly, we will now have to refer to Margaret Thatcher in the past tense.

Jon
We need men who dream of things that never were.


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