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VAT Hike Takes Effect on Popular Greek Isles Next Month

MykonosGreek islands with tourism growth and high per capita income will as of October 1 see a 30 percent value-added tax (VAT) hike on all their goods and services, doing away with a special reduced tax rate which was applicable until now.

According to the new law, the islands will be divided into categories depending on per capita income and tourism development and taxed accordingly. A reduced VAT rate will continue to apply on remote islands while those with limited tourism will see the tax hikes take effect on June 1, 2016.

The popular Cyclades including Mykonos, Santorini, Paros, Naxos, Milos, Syros and Tinos, as well as the Sporades isles such as Skopelos are expected to be the first to bear the brunt of the new taxing regime.

A ministerial decision will be issued in the coming days requiring businesses on the islands to revert to the new (as foreseen by the third bailout package signed earlier this year) rates depending on category.

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