Greece Extends Discounted VAT for Five Islands

The reduced value-added tax (VAT) regime for five Aegean islands in Greece has once again received a six-month extension, according to a ministerial decision signed recently by deputy ministers of finance, Apostolos Vesiropoulos and Theodoros Skylakakis.

The islands in question are those in the northeastern Aegean that have received the main burden of refugee flows – Leros, Lesvos, Kos, Samos and Chios. The reduced value-added tax regime sees a 30 percent discount on VAT rates.

The special VAT status will be extended for the five islands until December 31, 2020.

It is reminded that the abolition of reduced VAT rates for 27 Northeast Aegean and Dodecanese islands originally took effect on January 1, 2018. Leros, Lesvos, Kos, Samos and Chios had been exempt from the higher VAT rates originally until June 30, 2018, but since then have been receiving consecutive six-month extensions.

All the islands, with the exception of the five, have been required starting January 1, 2018, to implement new VAT rates from the 5 percent, 9 percent and 17 percent to 6 percent, 13 percent and 24 percent, respectively on basic food items, medication, hotel stays, books and magazines.