Five Greek Islands to Keep Special Tax Status Until June 30, 2018

Chios

The five Aegean islands that have received the main burden of refugee flows, will maintain their special tax status for another six months, the Greek Finance Ministry said on Tuesday.

“The government, in recognition of the particular problems faced by the islands, has agreed with the institutions to extend the measure of reduced value-added-tax (VAT) rates for Lesvos, Chios, Samos, Kos and Leros until June 30, 2018,” the ministry said in an announcement.

The special tax status sees a 30 percent discount on VAT rates.

27 Greek islands to lose reduced value-added-tax (VAT) rates

Leros

Moreover, the ministry said that islanders on the 27 Greek islands that will lose the special VAT status as of 2018*, by the end of the year will be granted an extraordinary social compensation on the basis of social and economic criteria. The process of implementing this measure will be announced directly by the ministry.

The abolition of reduced VAT rates from the Greek islands is a demand of Greece’s international lenders. The measure, first introduced in 2015 to gradually take effect on the Greek islands, had been suspended once again for the aforementioned islands in 2017.

* As of January 1, these islands will see the new VAT rates will go from the current 5 percent, 9 percent and 17 percent to 6 percent, 13 percent and 24 percent, respectively. As a result, increases will be noticed in prices for medication, hotel stays, books and magazines and basic food items.