Changes in VAT rates
Αs from 13 January 2014 the standard rate of VAT increased from 18% to 19% and the reduced rate of 8 % to 9 %.
The reduced rate of 5% remains unchanged.
The main categories falling under the reduced rate of 5% are the following:
• Books, leaflets and similar printed materials.
• Hairdressing Services.
• Renovation and repairing of private houses.
• Sale or Construction of a house used for permanent residence (from 1.10.2011).
From the change of the reduced VAT rate from 8% to 9%, the following categories are affected:
• Restaurant and catering services
• Hotel Accommodation.
• Taxi and Bus services for the transportation of passengers and their luggage.
• Local transportation of passengers and their luggage by the sea.
We would like to emphasize that under existing VAT law, all taxable persons affected by the change in the rate and keep stocks not in electronic form, have an obligation to do physical count of stock until January 12, 2014. The stock take counts should be kept for six years as required by the law.
Place of supply of services relating to persons established in the Republic.
Based on recent circular from the VAT authorities, the services provided to a person with a business establishment in the Republic, deemed to be given to that person whether the person who gave the instructions for the provision of these services is another person outside the Republic.
For companies incorporated in the Republic, regardless if they have other business establishments abroad, if the provided services are directly related to the tax obligations in the Republic, the place of supply of services is the Republic and taxed with VAT 18% (19 % from 13/01/2014 ) .
Indicative services that should be taxed in the Republic either provided as a separate service or offered as a package are:
• Audit and accounting services ,
• Preparation of financial statements
• Administrative services related to tax filings or other tax obligations of a business in the Republic
Please conduct us for any further information or clarifications needed.