As part of government measures to support businesses impacted by soaring energy prices, the Greek Finance Ministry is considering extending to the end of the year a reduced VAT (value added tax) scheme which currently applies to tourism, transport and food & beverages (F&B) services.
Lower VAT rates on these services are currently in effect until June 30, 2022, however, in view of the unprecedented circumstances, the government is preparing to extend the 13 percent tax cut measure to support the sectors.
According to media reports, the finance ministry may even decide to apply the 13 percent VAT reduction to cinema tickets, gym and dance school fees and to extend the measure into 2023.
Finance Minister Christos Staikouras has said the measure, budgeted at 250 million euros, would remain until the end of the year. The aim is among others to strengthen the competitiveness of the Greek tourist product.
More specifically, reduced VAT rates apply to:
– transport services: from 24 percent to 13 percent on tickets for trains, metro and tram, city and intercity buses, airline and ferry tickets, and mixed transport by road, air and sea
– F&B: from 24 percent to 13 percent on coffee, beverages (tea, chocolate, etc), and non-alcoholic beverages served at restaurants, bars and cafes
– accommodation: 13 percent VAT on accommodation with breakfast included or half board; 5 percent of the full rate is subject to 24 percent VAT with the remaining 95 percent taxed at 13 percent; all-inclusive accommodation is taxed at a 13 percent rate for 90 percent of the price.
The extension, once officially announced, will help thousands of small and medium-sized tourism, F&B and transport services providers remain viable after being hit hard by both the pandemic and the energy crisis.