Greece to lower VAT rate to 20%

31 May 2011

A proposed cut to the standard VAT rate from 23% to 20% has emerged as part of ongoing funding discussions between the Greek government, IMF, EU and European Central Bank.  There is also a linked reduction in the reduced VAT rate, which applies to food and other basic supplies, from 13% to 10%.  Click here to read about the two VAT increases in 2010 from 19% to 23%. It is not yet clear when this VAT cut will be implemented as it must be ratified by the Greek Parliament.

These cuts are viewed as essential to bring Greek political agreement on a further round of austerity measures and to secure continuing European funding.  A new round of funding is due in June, as part of a Euro 110 billion bail out in 2010.

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