Wide Ranging VAT Reductions Approved in Greece
The Prime Minister of Greece, Alexis Tsipras, has confirmed the Greek parliament have approved his proposal to reduce the rate of VAT across various sectors in the country as previously stated here.
The new rates became effective at the end of May 2019, with the following amendments:
- A reduction in the rate for certain food and drink services (such as restaurants and catering services) from 24% to 13%
- A significant reduction in the rate for household gas and electricity from 13% to 6%.
The reduction from 24% to 13% on food & drink services is expected to produce financial relief for millions of Greek households who have been paying a high price for staple food items since 2015.
The goods which will be affected include: Coffee, tea, sugar, salt, spices, sausages, jams, chocolates, croissants, nuts, biscuits, canned food, snacks, bread, snacks, cereals, sunflower oils, corn, all vegetable fats, food items primarily made up of flour or cereals, soups, fish and types of pasta
The biggest area of contention was around Greeks favourite and most commonly consumed drink, coffee. Initially, VAT rates on coffee products were to remain at 24% however public outcry led to the Finance Ministry changing the law the very next day, and announced a reduction for coffee VAT when the product is sold in supermarkets. However, for served coffee, the VAT remains at 24%.
In addition the VAT will also be reduced from 24% to 13% for catering services and this will affect prices for food in diners, bakeries, restaurants, taverns, cafes, patisseries, fast food facilities and canteens.