Greece to Cut Corporate Tax Rate for Fiscal 2019

Tax cuts follow improvement in Greece’s economy and progress toward meeting goals set following its debt crisis.

Greek Prime Minister Kyriakos Mitsotakis confirmed, during a speech on 7 September 2019, that Greece will cut its corporate tax rate from 28% to 24% for fiscal 2019.  The cut is part of an effort to boost the country’s economy. The withholding tax on dividends also will be reduced from 10% to 5%. The Prime Minister also predicted that the corporate rate eventually will decline to 20%, but did not specify a date.

Individual taxes will not be cut at this time, largely because there is not enough revenue to accommodate both an individual tax cut and the substantial reductions to the unified property tax made in July. That cut was approximately 22%.

Taxes in Greece increased greatly as part of austerity measures imposed by the European Union following the country’s debt crisis. Greece’s creditors insisted upon a primary budget surplus of 3.5% of GDP, toward which Greece has been making progress.  Following its victory in snap elections held in July, the New Democracy party has been working to convince the EU that Greece is on a sound path, and that the primary budget surplus requirement should be reduced to 2%. It has been reported that outgoing IMF Managing Director Christine Lagarde, who will take over as head of the European Central Bank, favors the reduction.