V.A.T. domestic Taxation and the benefits while applying the E.U. VAT Directive
Value Added Tax
Value added tax (VAT) was introduced in Greece by Law 1642/1986, which entered into force on 1 January 1987 and constitutes the VAT Law, codified by Law 2859/2000. VAT replaced the turnover tax, stamp duties on several transactions and a large number of other indirect taxes.
Council Directive 91/680/EEC of 16 December 1991, supplementing the common system of value added tax and amending the Sixth Directive with a view to the abolition of fiscal frontiers, has been implemented into Greek VAT law. From 1 January 1993 all customs checks at internal borders within the European Union have been abolished, and customs documentation for goods moving across the internal borders is no longer required.
Greece has also implemented the First and Second Simplification Directives. The Second Simplification Directive (95/7/EC) was implemented by Art. 12(11) of Law 2386/1996, which inserted Art. 26 into the VAT Law. This Article provides for the establishment of VAT warehouses following the granting of a licence by the VAT Directory of the Ministry of Finance. Products owned by the licensee or a third party (the latter subject to permission by the tax authorities) can be stored in these warehouses. However, products subject to EU-regulated excise duties (mineral oils, tobacco, alcohol) or destined for retail sales cannot be kept in these warehouses. Goods supplied to specific categories of taxable persons can also be stored in the warehouses
Greece has a classified V.A.T. system. The standard rate is 23% (21% before 1 July 2010). A reduced rate of 6.5% (5.5% before 1 January 2011) applies to books, newspapers, periodicals, pharmaceuticals and hotel accommodation services.
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