Tax Planning 2020

During the last years, the feasibility of many businesses was undermined by the tax and insurance burdens. The new tax bill improves the fiscal framework for doing business and brings new opportunities for business development and tax planning.

The main changes are following:

1. Τhe gradual reduction of the corporate income tax rate

For the year 2019, the corporate income tax rate is 24% (instead of 28%, which was applicable for the year 2018). The corporate income tax rate for period starting from 1st of January 2020 will be 24%, which is going to be further reduced to 20%.

 

2. The tax on dividends is reduced to 5% (from 10%)

The tax on dividends has been reduced, since 1st of January 2019, to 10% from 15%, which was the relevant tax rate in 2018. The further reduction to 5% from 01/01/2020 is a clear motivation for the potential investors. An example depicts how someone can benefit: an L.T.D. that gives to the shareholder 10.000 € dividends, will save 1.000 € as the tax on dividends will be 500 € instead of 1.500€.

 

 3. The income tax rate for employees, retired and entrepreneurs (since 01/01/2020) up to 10.000€ is reduced to 9% (from 22%)

The reduction of tax income rate will benefit entrepreneurs up to 1.300 € from income tax reduction. Due to the fact that entrepreneurs are obliged to pay in advance the next year’s tax income, there is an additional benefit, up to 1.300 € from the tax income’s payment in advance.  

 

4. Reductions of the social security contributions for entrepreneurs.

The entrepreneurs’ social security contributions used to be calculated based on business profit. In January a new law will provide abraquet of six fixed amounts to choose from devending on a redistribution retirement plan. An exemption is made for freelancers during their first five years of operation with a low amount of 126€ per month.

    Α level         : 210 €
    Β level         : 252 €
    C level         : 302 €
    D level         : 363 €
    Ε level         : 435 €
    F level         : 566 €

 

5. Reduction of 30% on Property Tax during the period 2020-2021

In 2019 the Property Tax was reduced 22% and in 2020 is planned to be further reduced by 8% for all the properties.

 

6. The non-taxable income increases 1.000 € for each child from 01/01/2020

In 2019, the non-taxable income is 8.636 € for non-married tax payers, 8.863 € for married with one child, 9.090 € for married with 2 children and 9545 € for married with 3 children and more. This means that the married taxpayer with 1 child will have non- taxable income 9.000 €, the married people with 2 children will have 10.000 € non-taxable income and with 3 children and more it becomes 11.000 €.

 

Link’s Team, can support Businesses to schedule their Tax Planning for 2020 and to benefit from the positive changes of the new fiscal Bill.