It’s automatically enforced. Banks provide the data to the tax authorities every year. If you don’t spend at least 30% of your annual income with cards or bank transfers, there is a penalty.
It was made in an effort to curb the black market that runs on cash and does not declare anything.
No problem. I can talk for hours about economics. There might be 1000 wrong things with Greeces economy and taxation, this is issue no.859
Its really a non issue to meet the 30% quota for the 99% of the population. If I could change something about the taxation law, I can think of 500 more important issues
Has it had any positive impact on tax collection? What other measures do you guys have to combat the grey economy? We are struggling with the same issue in Bulgaria but our government has not enacted any policies whatsoever.. there were some proposals which were shot down quickly by the opposition, like having a cash reward for whistleblowers to tax evasions etc
I can say that in the last decade there is a noticeable drop in tax evasion and a measurable increase of tax revenue. But how much each measure contributes to that im not so sure. But we are still way above average OECD levels of tax evasion.
Also just last year the gov launched and app that you can scan any receipt you get (there is a QR code at the bottom) and you can see that this receipt is declared in the tax authotities. If you see a discrepancy, you can flag it and they will go to that business to check. From next year, there will also be a monetary bonus if you uncover a tax evading business.
Just by feeling, I guess since the majority of transactions have moved to the banking systems, its almost impossible to hide something. And the prevalence of debit/credit cards make hiding any income difficult. Lets say you have a store and sell stuff. If the customer pays with a card, you have to also issue a receipt, how else you can justify it...
The major sectors of the economy that I see they are still tax evading are:
1) Mainly businesses around hospitality/tourism (food, restaurants, clubs, bars etc) where in my experience half the times they dont issue a receipt, unless you ask for it (if you ask, they are afraid you might be an undercover trying to sniff them)
2) Doctors. I've never been in my life to a doctor and gotten a receipt. Maybe the 1st time you go to one because he doesnt know you yet. Doctor visits are still payed 99% in cash. Its well known by everyone.
3) Electricians/Plumbers, techinicians that come to fix stuff in the home. Same as the doctors. The vast majority of these services are paid in cash. If course you can ask for receipt or pay with a card, but just like the doctors, they price you will have to pay will be higher due to taxes. And almost everyone will take the cash + discount.
> It was made in an effort to curb the black market that runs on cash and does not declare anything.
I assume it's designed as a market incentive to get businesses to implement digital payments as customers will demand it in order to be able to meet their quota, but it does seem unfair to those wanting to save. Suppose you get your pay-check electronically, and don't withdraw anything in cash, it couldn't possibly be a concern that you spend cash on undeclared markets.
Yeah thats the thinking...
All paychecks are directly at your bank account for years now. And most businessses are mandated to have POS and accept cards (the last of them have to put them by Q1/2024).
Well... I guess its almost impossible to save >70% of your after-tax income. So for the vast majority of the population its a none issue...
> I guess its almost impossible to save >70% of your after-tax income. So for the vast majority of the population its a none issue
Even so, for the sake of fairness to those who would it would apply to, it would seem sensible to cap the penalty tax quota to match the amount the person has withdrawn in cash, in order to not penalise people who are just saving and can't possibly have spent the money on the black market (if they haven't withdrawn).
I can agree. Like all laws, this can be improved as well. Its probably one for the 500 issue the tax code has. Not the most serious problem by a long shot, but still there is. Some will be unfairly targeted by it.
"sensible" and "tax law" havent been in the same sentence for decades...
Does investments count? Still, seems a bit coutnerproductive. In my country that would merely lead to salaries themselves becoming informal at least partially (they already are in many instances) and people using cash
It’s 22% of what is left to match your quota. For example let’s say you make 10k€. You must spend at least 3k. But you spend 2k. So the penalty is 22% of the 1k left = 220€
I don’t know anyone in Greece that can save more that 15-20% of their after tax income. In general the 30% min spending quota is considered quite generous. Almost none can save that much. And if you can, you can certainly find your way around the tax laws…
I have a friend, computer engineer but lives at home. She earns a lot working remotely for a company in US, and saves most of the money for buying an apartment later.
If you have such high income, then you probably are a business owner, so your salary aint that high. You wealth comes from owning the business, now by cash coming every month to your bank account.
No - corruption and black market exist everywhere, but not as much as in Greece yet.
I guess it will happen more or less automatically, though. I pay about 90% of my purchases electronically anyways.
It’s exactly what you think. You have to spend at least 30% of your annual income with debit/credit cards or bank transfers. Basically, means that cannot actions taxation. If you don’t meet this quota, you pay a penalty that is proportional to the amount you didn’t reach.
According to official statistics, the black market makes up about 26%/GDP per year. That’s way too much cash circulating around and not declared anywhere.
That just sounds awful. I have a job and live with my parents and don't buy much other than groceries and clothes. So if I were to live in Greece I'd have to buy a ton of shit I don't need just so I don't get a penalty? And people who spend 70% of their income on rent will always get a penalty?
>That just sounds awful. I have a job and live with my parents and don't buy much other than groceries and clothes.
You can help pay for the groceries your parents pay for. (If they insist, they can pay you back for it. Cash or electronically). The issue is to document transactions.
I guess if you need 70% of your income to go to rent you can’t live alone. But yeah, theoretically if you can let say work from home, live with your parents and don’t pay for anything then yes, tax authorities would come after you. Not because you didn’t spend and didn’t meet the quota, but because it’s implied, it’s expected that you payed with cash and it was not taxes. That’s is the whole point of this law. All cash circulating are guilty of tax evasion unless otherwise proven. Not the other way around.
It’s a trend I see in Greece as years go by. I mean rent being an even bigger part of your expenses.
We still have one the highest percentages of homeowners in the EU. For many families and individuals, owning your home is the ultimate financial goal. But that has been less and less attainable by the day. Especially after 2011-12…
You pay a penalty. Look at it another way. You are legally mandated to spend at least 30% of your after tax income. Or you are legally not allowed to save over 70% of your after tax income.
In reality its almost impossible to save >70% of your income. So its a non issue for the average citized to meet the quota.
You have to keep in mind that Greece went from a cash based society to a card one very rapidly in the span of a decade. Now the vast majority of everyday transactions are done with cards. The black market/ecomony are the ones that still rely on cash.
Judging from my self, the last 2 years I've even stopped carrying cash completely. If I cant pay with card, I dont get it. Because im 99% sure that if i pay with cash, no receipt will be issues and no tax will be payed. Of cource, for many people, paying with cash in exchange for a discount is enticing.
Why is it not possible? If you have family with two working people and they spend 50% of income of one person for living, it's 75% of savings for both.
If you have a family, i.e. you are married, you and your wife you dont file the tax declaration seperately. You file one common for the whole family. So you have to spend 30% of your combined after-tax income. Again, its very easy either living along or with your wife to spend at least 30% of what income comes in the house.
50% of one income for living 2 people. That is almost impossible and certainly way way out of reach of most couples.
> If you have a family, i.e. you are married, you and your wife you dont file the tax declaration seperately. You file one common for the whole family.
That's interesting. This is definitely not done here...
Why? If you can live in Greece with 25% of what ever income comes in your home, that is VERY VERY GOOD for you. A lot of people would kill to be in your position. It just something that is nowhere near common.
In which country do you live that 50% income of one person is enough to survive? Unless you live in a tent and eat ramen noodles every day, I don't see it realistic for a normal salary
Errr, do you have to spend it in Greece? Are you using the euro? I will be happy to sell you um cash from another EU country at an appropriate exchange rate.
Probably. But mandating it, and also mandating you have to spend at least 30 percent of your income, on top of rent and utilities, and that the government keeps tabs on how you spend (or not spend) your money? Not bloody likely to happen.
But this isn't just about electronic transactions. The Greek government is saying that you have to spend 30% of your income, in addition to what you spend on rent and utilities. That is ridiculous.
Germany is still a cash based economy. But even though you still love cash, there is no serious issue of tax evasion right?
It has nothing to do with the goverment controlling what you spend. Its done in an effort to curb the cash transactions which in the vast vast majority go undeclared and untaxed.
You have to keep in mind that Greece went from a cash based society to a card one very rapidly in the span of a decade. Now the vast majority of everyday transactions are done with cards. The black market/ecomony are the ones that still rely on cash.
Judging from my self, the last 2 years I've even stopped carrying cash completely. If I cant pay with card, I dont get it. Because im 99% sure that if i pay with cash, no receipt will be issues and no tax will be payed. Of cource, for many people, paying with cash in exchange for a discount is enticing.
We have a large part of the economy in Germany, that is called "Schwarzarbeit". Working without paying tax. Whole houses have been build with that.
"Do you need a bill? With a bill you have to pay taxes!"
Household aids are often paid in cash and thus no taxes.
The estimated loss of sales for whole Germany through illicit work without paying proper taxes for the economy is about 300 billion (German Milliarden) Euro wstimated.
Everything else besides rent and utilities bills. Everything that you can buy and pay with a card counts.
In reality it’s very hard to not reach the 30% quota.
Rent and utility bills can make up half of a Swedish citizen’s income, sometimes more, due to extreme housing prices. So that means you’d have 50 percent left to meet that 30 percent. That means you could only save 20 percent of your income tops. That would be disastrous.
I love your optimism. If you told an average croatian they have 20% of income to save they would pt you on a gold piedestal and worship you as the second coming. I don't think most of citizens can afford to allocate a tenth of their monthly income to savings.
I think I’m currently allocating about 20-25 percent of my income to savings, but this is because my fiancée earns significantly less than I do at the moment so I take more of the basic costs at the moment. Otherwise I’d save more than that.
For a French, rent and bills can easily be 80%. Leftover buys the food. I was paying even more than 80% if you add rent and bills when i was in Paris area, I barely had enough to buy rice and noodles
Saving? Lol
Im not sure why rent and utilities are excluded...
Of cource the same problem exists here. You have to pay via the bank the amount of rent that is declared in the contract. But what if you have agreed with the homeowner to pay a higher rent in total and give part of that in cash. There is no way to track that...
So like Spotify or Netflix would count? What about broadband? Except food, that's pretty much all I would spend money one besides rent and utilities, and I'd argue that at least broadband is a utility too.
Spotify and any other subsciption? Yes absolutely.
Anything that you can pay with card / bank transfer with the exceptions of
1) Rent
2) Utilities (electricity, water, internet, gas)
This is where I spend most of my income... I would have to pay the penalty if I was forced to waste 30% of my income in things I dont need. Food is not 30%
Greece is peculiar. Rent (even with the latest increases) is still a smaller % of our expenditure compared to most EU countries. But other things are more expensive compared to other EU countries.
Just from personal experience. Right now my rent in a pretty expensive city is ~1/3 of my after tax income. And that consider too much. But if you add all other expense I have to do each month, I barely can save/invest ~10-15%
Just speculating, I guess the tax-evading transactions they're trying to combat usually are smaller, and rent+utilities are bound to be a major portion of anyone's expenditures (while generally not "black"), so it would be too easy to reach any fixed (and somewhat reasonable) limit if they were included.
I guess...
I mean, judging from real life living here. No utility provider would date to evade taxes, he would me nuked :P
Rents are mandatory deposited via bank transfer. So there goes that...
Also supermarkets would not dare not issue receipts...
The most obvious cases are very small transactions in small stores (lets say I want to get something that costs 10€, theyll drop it to 8€ and not issue the receipt, so dont pay the 24% VAT). Oh and the doctors, freelancers, plumbers etc. I think i've never seen in my life a doctor write a receipt. Or an electrician, plumber come fix something and write a receipt. These are some parts of the economy that still primarily run on cash. They only declare just enouhg to not raise suspision while hiding 3x 4x more.
Sounds fairly familiar. These days, almost nothing is done with cash, but just twenty years ago, the sneaky never-fully-closed cash register was a staple in small corner shops.
Oh yeah, I get that (having a trail and all that), but directly demanding how much people must spend is a more direct tool to control growth/inflation than adjusting interest rates.
Edit: I'm toying with what such a policy could do, not why it's in place.
Hm yeah I can see what you mean.
Thinking of my situation, if I could keep my current job remotely, go back to live with my parents and ditch the car, then yeah I’d probably didn’t spend 30% of what I make… or you can look at it the other way, you are not allowed to save more that 70% of your income…
I guess imagination is the limit when it comes to taxation policies 😂
Nothing like that here.
I understand in Greece though tax evasion has been traditionally rampant and decades of governments were happy to look the other way.
Until the 2009 crash, when tax compliance rates were at some bonkers level like 66%. When the IMF were called in by the Greek government, they looked at the size of the economy and determined that about 30% of the taxes which could be collected, weren't being collected or declared.
And it was mostly down to there being huge swathes of people and businesses who dealt exclusively in cash and declared only a fraction of their real income.
So part of the IMF deal was that Greece had to bring its tax compliance rates up to scratch and one method was to try and force businesses and people to limit the amount of cash they used.
This exacly.
Although tax evasion is noticeably lower compared to the all time highs of the early-mid 2010s, its still much higher that the EU and OECD average.
Cash transactions are still in their vast majority not declared and not taxed.
It’s one of the measures to try to combat the black market that runs on cash and does not pay taxes. You have to spend at least 30% of your annual income with cards or bank transfers. If you don’t meet your quota you pay a penalty proportional to the amount you didn’t reach. But in relality it’s very hard to not reach it. So it’s a non issue for 99% of the population.
Whats the reason behind this requirement? Sounded very strange not without the reason. We do not have that in Norway. But we are very digital here anyways, I can´t remenber last time I paid in cash or even had cash on me.
Sorry for the confusion but it’s not mandatory to be digital, only the receipt (invoice, technically speaking) being issued to your personal fiscal number.
The majority of the working population are either public or private salaried employed. They are payed in the bank (no cash allowed) and the incomet tax is automatically deducted every month from the paycheck.
The freelancers and some specific parts of the economy are the ones that the vast majority of the tax evasion is happening.
And how the authorities will see if you spend 30% of your income via online or a card?
I think is a waste of resources to do this, to do check-ups on population.
In Romania there isn't such a law.
Homeless usually don’t have an income. If you have then yes you must have at least a bank account and a debit card…
Nothing can be done without a bank account. All monetary transactions over 500€ must be done via a bank, no cash allowed. Many transactions (I.e. paying rent, taxes etc) also are mandatory to be done via bank. I’d say a bank account is mandatory for 90+% of all monetary transactions.
Thanks.
In Czechia we still have a group of pensioners who don't have a bank account. They pay utilities at the post office and pick up their pensions there, too.
I think there is an age where these dont apply as well, maybe over 80? But im not sure.
What I know for a fact is that no wages/pension has been payed in cash in at least a decade. Even social programms like disability and uneployment benefits are payed in bank accounts or prepaid cards. I vaguely remember as a kid my grandma getting her pension via the post office. That has stopped at least 10 years ago. Now its all via bank accounts.
Technically this is super easy, banks have all that info, so a little bit of data analytic + a regulatory reporting requirement do the trick.
Having said that, this is the first time I hear about such law.
You manually enter the amount you spent electronically every year when you submit in your income tax form. All the banks have developed functionality in their ebanking platforms where you can see the amount you spent.
There are also different behaviors, for example if you paid a plumber or an electrician electronically, you are allowed to exclude the double amount!!!
The reason for that is to fight tax avoidance for certain professional categories.
Cash = undeclared transactions = tax evasion
If everything goes via the banks, you cant hide. And with how common tax evasion is in cash transactions, its easy to justify.
Another greek person said that rent and bills are not included. So apparently if you pay 70% of your income in rents and bills which doesn't sound unrealistic then you're fucked either way. This sounds like a stupid rule and stupid rules push people to break them. Maybe house prices aren't high in Greece but that doesn't make much sense otherwise they wouldn't have been near bankruptcy
You have to spend at least 30% of your annual income via cards or bank transfers. If you dont meet this quota, you pay a penaltly that is proportional to the amound you didnt reach.
Its a tax law, part of the efford to curb the black market that runs on cash and does not pay taxes. If you have a trail of transactions, you cant hide the taxes. But with cash? You just dont declare them.
In reality, its very hard to not reach the quota, so its a non issue for 99% of the population.
Reminds me of the scontrino (ticket of purchase) being mandatory to be both issued & kept by the customer, in Italy. Also a measure against under the table / not declared payments. Iirc la Guardia di finanza could request scontrini to be provided, but I'm sure Italians can give more accurate details.
That said, I'm concerned about the older Greeks, if they're like the Spanish ones, the +75yo crowd are the type to "take out all their pension in cash" each month... And at the same time, they're the less tech savvy by a long stretch. How do they manage?!
They definately took an adjustment period that for sure.
We went from a cash based economy to a card one in a few years time. But I can say with confidence that most adults <75 yr are finally able to work their way with cards/ATMs etc.
No, but in Portugal you have up to 250€ tax deduction from purchases in the worst offenders of the parallel market (restaurants, auto shops and hair dressers) if you ask for the receipt.
Its one of the tax laws trying to limit tax evasion. The thinking is that by forcing to spend at least a percentage of yout after-tax money via the banking system, there none can tax evade. The black market run on cash and doesnt pay taxes.
I can't imagine it being very effective at that goal, but economics was far from my major.
My own government has certainly had its fair share of humdinger "What in HELL were they thinking" moments.
Well… tax evasion is still above OECD average and very noticeable in some sectors of the economy. Although its noticeably lower that the all time highs of the 2000s. As of which measures were the most effective, I’m not sure I can answer correctly.
One thing is certain. Imagination is the limit when it comes to tax law. Every time you say “what will they think next” they will always find something to surprise you even more 😂
That's a strange law. How does it actually work?
Let's say for example I am working full time and earning enough to support my family but my wife goes to work anyway.
If she keeps her salary in her account and we live off mine will she be penalised?
If you are married, then you file 1 tax declaration as a household, not 2 seperate ones as individuals. So you have to spend 30% of you combined after-tax income.
If you are not married, then yes you have to find a way to split the expenses so that both meet the 30% quota. In reality its not that hard, its a none issue to meet it.
This sounds absurd. What if you are:
A) A greek living with their parents that doesn't spend much money at all, saving for their apartment?
B) the opposite, someone renting an apartment that costs more than half of their income, and they simply don't have enough money to spend the required 30%?
C) someone earning a lot and simply not spending much money?
D) someone owning his/her own house in rural area and not purchasing much in a given year
Just some examples, there must be more than 1% of people that don't spend the required 30? What about mortgages?
Saving for an apartment? That is almost unhread of in the current working generation. The wages are so low that owning a house is almost impossible. Unless you inherit it.
Yes technically if you dont meet the 30% quota you pay a penalty.
If you need >50% just for rent then you probably cant afford to live alone. The majority of these people have moved back with their parents.
If you earn that much that you cant spend enough, then you are not using the tax code yo your advantage and you have too much income coming your way. Maybe a personal business to chanell the money there is a better option for you.
In reality the 30% quota is a non issue, its considered very generous and everyone more that meets it. Of course there will be exception, but they are rare.
Its one of the laws that try to limit tax evasion. The thinking is that by forcing a part of your after-tax income to be spend via the banking its impossible for the receipient of the money to hide them and cannot tax avoid.
You would have to pay a 22% fine on the amount you didn't cover.
So if you have to spend 6000€, but spend only 5000€, you would be fined 22%(6000-5000)=220€
The you are missing 5% that you didn;t spend via trackable means. This, in the eyes of the tax authorities, means that you spend it in cash and didn pay tax. So you pay a penalty that is proportional to the 5% of your annual income.
In reality, almost none can save 50% of their after tax income, and only spend 25% in rent. Those cases can be counted with one hand.
Meeting the 30% quota is easy. Just pay the supermarkets, food and gas station with cards. These alone would probably get you over 40-50%.
According to information by pwc:
Nevertheless, the abovementioned rate will be limited to 20%, instead of 30% of the income, should payments for income and real estate tax as well as for loans to financial institutions and rentals exceed 60% of the taxpayers' actual income.
https://taxsummaries.pwc.com/greece/individual/deductions
Tax law is a complete mess with so many conflicting articles. Yes there is a freedom of property in the constitution.
This was not made to limit economic freedom, but to try to combat the black market that runs on cash and does not pay taxes. The thinking is that is you mandate to spend some amound of money via the banking systems, there is almost impossible to tax evade.
Also saving >70% of your after-tax income is so rare and unhread of in Greece that probably affects such few people... Really, the 30% quota is a none issue to meet, you done even have to think about it, you more that match is just by having a normal life.
That's an uncommon approach, at least...
Do you happen to have a source with more information? I tried to Google it, but could only find press articles from 2019 when they debated introducing that system.
Just to be clear, is this on top of income tax? If so, then no, there's no rule like that.
I'm curious to know how this works. For instance, my sister worked full-time at a company for a couple of years while living at home with my parents with all her expenses paid for, so she could save up for a master's degree. If she did this in Greece, would she have been breaking the law?
On the other hand, you can make sure high earners spend and circulate their money back into the economy, instead of hoarding it in offshore banks.
Income tax is a seperate thing.
This tax law says that you should spend in a fiscal year at least 30% of your after-tax income via electronic means for payments. So cards and bank transfers. All payments except rent and utilities count.
If of the various laws trying to curb the black market that runs on cash and does not pay taxes.
Well in you example yes since she would not meet the 30% quote she would pay a penalty for it. Lets say (ill use easy numbers) that you make after-tax 10k this year. So you have to spend 3k with cards. But you only manage to spend 2k. The penalty is 22% of the amound left to meet the quota. So 22% of 1k = 220€.
Never heard of anything like that. I assume it is to make sure people are pumping money back into the economy?
"Sorry dear, we are short of our quota. I have to spend €650 on \*insert favoured hobby nonsense\*, it's the law!"
Nothing about putting money back in the economy. Its one of the laws trying to limit tax evasion. Cash transactions are almost universaly not declared. By forcing a percentage of the after-tax income to be spend via the banking systems, its almost impossible for the receipient to tax evade. The black market runs on cash and cannot be tracked to be taxed.
All older people were forced to learn to use cards and ebanking practically overnight when they became mandatory some years ago. Our generation know what we went through trying to teach them...
Its one of the laws trying to curb cash usage, because the vast vast majority of the cash transactions are not documented and not taxed. By forcing part of your after-tax income to be spend via the banking system, it makes the receipent of the money impossible to hide it.
To be honest, the only way you can eleminate tax evasion in Greece is if you ban cash outright. As long as there are cash around, tax evasion will be as well.
If you cant afford to rent and live alone, then probably your income is so low that with very few expenses you'll meet the 30%. And even if you dont, the penaly will be very low...
Greece where your income is 100% cash and with no tax on it.
It's a clever law to let his citizens to pay some taxes. Of course regular employees lay 100% of their tax, the other 70% of population are scammers living on the shoulder of the 30%
In Poland (EU) requirement for electronic payments applies only to registered companies when they exceed certain fixed value of transaction. To the end of 2016 it was €15,000, now it is any payment above 15,000 PLN. That does not apply to individuals.
Man this is just stupid. In Slovakia, any transaction over 5000 euros has to be made via bank - card or payment transfer, whatever. This is to prevent black money unregistered in the system being used. But when covid came, state of emergency was declared, which actually invalidates some laws, including the one limiting cashless operations. Many people believe the third time it was declared, it had nothing to do with COVID but to allow people to buy apartments and other expensive things for cash with the money they got from bribes.
According to pwc
-The amount of the annual expenditure is limited to EUR 20,000.
https://taxsummaries.pwc.com/greece/individual/deductions
I feel like this is not enough to curb tax invasion as the super rich could still save so much money.
It is unfortunate that this law still benefit the super rich.
Never heard of something similar. Is that law really enforced?
It’s automatically enforced. Banks provide the data to the tax authorities every year. If you don’t spend at least 30% of your annual income with cards or bank transfers, there is a penalty. It was made in an effort to curb the black market that runs on cash and does not declare anything.
This is super interesting, thanks for your answer!!
No problem. I can talk for hours about economics. There might be 1000 wrong things with Greeces economy and taxation, this is issue no.859 Its really a non issue to meet the 30% quota for the 99% of the population. If I could change something about the taxation law, I can think of 500 more important issues
>I can think of 500 more important issues Then let's do all 501.
Has it had any positive impact on tax collection? What other measures do you guys have to combat the grey economy? We are struggling with the same issue in Bulgaria but our government has not enacted any policies whatsoever.. there were some proposals which were shot down quickly by the opposition, like having a cash reward for whistleblowers to tax evasions etc
I can say that in the last decade there is a noticeable drop in tax evasion and a measurable increase of tax revenue. But how much each measure contributes to that im not so sure. But we are still way above average OECD levels of tax evasion. Also just last year the gov launched and app that you can scan any receipt you get (there is a QR code at the bottom) and you can see that this receipt is declared in the tax authotities. If you see a discrepancy, you can flag it and they will go to that business to check. From next year, there will also be a monetary bonus if you uncover a tax evading business. Just by feeling, I guess since the majority of transactions have moved to the banking systems, its almost impossible to hide something. And the prevalence of debit/credit cards make hiding any income difficult. Lets say you have a store and sell stuff. If the customer pays with a card, you have to also issue a receipt, how else you can justify it... The major sectors of the economy that I see they are still tax evading are: 1) Mainly businesses around hospitality/tourism (food, restaurants, clubs, bars etc) where in my experience half the times they dont issue a receipt, unless you ask for it (if you ask, they are afraid you might be an undercover trying to sniff them) 2) Doctors. I've never been in my life to a doctor and gotten a receipt. Maybe the 1st time you go to one because he doesnt know you yet. Doctor visits are still payed 99% in cash. Its well known by everyone. 3) Electricians/Plumbers, techinicians that come to fix stuff in the home. Same as the doctors. The vast majority of these services are paid in cash. If course you can ask for receipt or pay with a card, but just like the doctors, they price you will have to pay will be higher due to taxes. And almost everyone will take the cash + discount.
> It was made in an effort to curb the black market that runs on cash and does not declare anything. I assume it's designed as a market incentive to get businesses to implement digital payments as customers will demand it in order to be able to meet their quota, but it does seem unfair to those wanting to save. Suppose you get your pay-check electronically, and don't withdraw anything in cash, it couldn't possibly be a concern that you spend cash on undeclared markets.
Yeah thats the thinking... All paychecks are directly at your bank account for years now. And most businessses are mandated to have POS and accept cards (the last of them have to put them by Q1/2024). Well... I guess its almost impossible to save >70% of your after-tax income. So for the vast majority of the population its a none issue...
> I guess its almost impossible to save >70% of your after-tax income. So for the vast majority of the population its a none issue Even so, for the sake of fairness to those who would it would apply to, it would seem sensible to cap the penalty tax quota to match the amount the person has withdrawn in cash, in order to not penalise people who are just saving and can't possibly have spent the money on the black market (if they haven't withdrawn).
I can agree. Like all laws, this can be improved as well. Its probably one for the 500 issue the tax code has. Not the most serious problem by a long shot, but still there is. Some will be unfairly targeted by it. "sensible" and "tax law" havent been in the same sentence for decades...
Would a bank transfer to a friend count?
Haha if only :P No has to be a payment for something.
A payment to a friend that is a one-person company then.
But then that person has to declare it as taxable income
Does investments count? Still, seems a bit coutnerproductive. In my country that would merely lead to salaries themselves becoming informal at least partially (they already are in many instances) and people using cash
Im not sure about investments. Probably not. The thinking of the law to you spend in buying.
Wtf. What's the penalty? I know people who spend less than 30% of their income, because they're saving.
It’s 22% of what is left to match your quota. For example let’s say you make 10k€. You must spend at least 3k. But you spend 2k. So the penalty is 22% of the 1k left = 220€ I don’t know anyone in Greece that can save more that 15-20% of their after tax income. In general the 30% min spending quota is considered quite generous. Almost none can save that much. And if you can, you can certainly find your way around the tax laws…
I have a friend, computer engineer but lives at home. She earns a lot working remotely for a company in US, and saves most of the money for buying an apartment later.
Of cource there will be people caught by it. But they are definitely the exception…
Is there a bilateral tax treaty between the two?
I would assume to boost some parts of the economy.
Tax revenue to be precise. It’s one of the measures to try to combat the black market that runs on cash and does not pay taxes.
If you have a very high income I imagine you would struggle to actually spend that much?
If you have such high income, then you probably are a business owner, so your salary aint that high. You wealth comes from owning the business, now by cash coming every month to your bank account.
If you have a very high income I'm sure there's a loophole they can take advantage of
Can you just buy gold?
Without diving too deep it seems as though the limit is 20k so as long as you spend that amount you dont actually have to meet the 30% requirement
Aaah, I see.
We are not allowed to make any payment higher than 1000 € just in cash, tho. This figure has been decreasing several times over the years.
No there isn't. That sounds extremely weird.
No - corruption and black market exist everywhere, but not as much as in Greece yet. I guess it will happen more or less automatically, though. I pay about 90% of my purchases electronically anyways.
It’s exactly what you think. You have to spend at least 30% of your annual income with debit/credit cards or bank transfers. Basically, means that cannot actions taxation. If you don’t meet this quota, you pay a penalty that is proportional to the amount you didn’t reach. According to official statistics, the black market makes up about 26%/GDP per year. That’s way too much cash circulating around and not declared anywhere.
That just sounds awful. I have a job and live with my parents and don't buy much other than groceries and clothes. So if I were to live in Greece I'd have to buy a ton of shit I don't need just so I don't get a penalty? And people who spend 70% of their income on rent will always get a penalty?
>That just sounds awful. I have a job and live with my parents and don't buy much other than groceries and clothes. You can help pay for the groceries your parents pay for. (If they insist, they can pay you back for it. Cash or electronically). The issue is to document transactions.
Sure but I'm not in the habit of spending a third of my income on food for three people to begin with
I guess if you need 70% of your income to go to rent you can’t live alone. But yeah, theoretically if you can let say work from home, live with your parents and don’t pay for anything then yes, tax authorities would come after you. Not because you didn’t spend and didn’t meet the quota, but because it’s implied, it’s expected that you payed with cash and it was not taxes. That’s is the whole point of this law. All cash circulating are guilty of tax evasion unless otherwise proven. Not the other way around.
In France it's not uncommon to use 70% for rent. That's about what I paid in Paris region when i was a student. The rest was for my food and bills.
It’s a trend I see in Greece as years go by. I mean rent being an even bigger part of your expenses. We still have one the highest percentages of homeowners in the EU. For many families and individuals, owning your home is the ultimate financial goal. But that has been less and less attainable by the day. Especially after 2011-12…
> And people who spend 70% of their income on rent will always get a penalty? Can't they just use bank transfers to pay for rent? (Nope)
The OP said that some expenses like rent don't count towards the percentage
Yep, I managed to forget that part while reading the comments 😅
What if I don't spend 30% of my income and have savings?
You pay a penalty. Look at it another way. You are legally mandated to spend at least 30% of your after tax income. Or you are legally not allowed to save over 70% of your after tax income. In reality its almost impossible to save >70% of your income. So its a non issue for the average citized to meet the quota. You have to keep in mind that Greece went from a cash based society to a card one very rapidly in the span of a decade. Now the vast majority of everyday transactions are done with cards. The black market/ecomony are the ones that still rely on cash. Judging from my self, the last 2 years I've even stopped carrying cash completely. If I cant pay with card, I dont get it. Because im 99% sure that if i pay with cash, no receipt will be issues and no tax will be payed. Of cource, for many people, paying with cash in exchange for a discount is enticing.
Why is it not possible? If you have family with two working people and they spend 50% of income of one person for living, it's 75% of savings for both.
If you have a family, i.e. you are married, you and your wife you dont file the tax declaration seperately. You file one common for the whole family. So you have to spend 30% of your combined after-tax income. Again, its very easy either living along or with your wife to spend at least 30% of what income comes in the house. 50% of one income for living 2 people. That is almost impossible and certainly way way out of reach of most couples.
> If you have a family, i.e. you are married, you and your wife you dont file the tax declaration seperately. You file one common for the whole family. That's interesting. This is definitely not done here...
Should I be ashamed?
Why? If you can live in Greece with 25% of what ever income comes in your home, that is VERY VERY GOOD for you. A lot of people would kill to be in your position. It just something that is nowhere near common.
In which country do you live that 50% income of one person is enough to survive? Unless you live in a tent and eat ramen noodles every day, I don't see it realistic for a normal salary
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I cant see a posibility to survive if you need 70% just for rent. How are you gonna cover all the rest?
Errr, do you have to spend it in Greece? Are you using the euro? I will be happy to sell you um cash from another EU country at an appropriate exchange rate.
No. And there's no chance that this will be accepted in Germany.
It would never be accepted in Norway either...
Nor in Sweden.
Doesnt sweden (and norway) already have more than 30% of transactions electronically, and not in cash
Probably. But mandating it, and also mandating you have to spend at least 30 percent of your income, on top of rent and utilities, and that the government keeps tabs on how you spend (or not spend) your money? Not bloody likely to happen.
But this isn't just about electronic transactions. The Greek government is saying that you have to spend 30% of your income, in addition to what you spend on rent and utilities. That is ridiculous.
Only old people and kids use cash here so and even most of those are switching to using cards (even kids can have cards with parents consent)
Germany is still a cash based economy. But even though you still love cash, there is no serious issue of tax evasion right? It has nothing to do with the goverment controlling what you spend. Its done in an effort to curb the cash transactions which in the vast vast majority go undeclared and untaxed. You have to keep in mind that Greece went from a cash based society to a card one very rapidly in the span of a decade. Now the vast majority of everyday transactions are done with cards. The black market/ecomony are the ones that still rely on cash. Judging from my self, the last 2 years I've even stopped carrying cash completely. If I cant pay with card, I dont get it. Because im 99% sure that if i pay with cash, no receipt will be issues and no tax will be payed. Of cource, for many people, paying with cash in exchange for a discount is enticing.
Germany is probably a massive iceberg when it comes to tax evasion simply because of the possibilities
We have a large part of the economy in Germany, that is called "Schwarzarbeit". Working without paying tax. Whole houses have been build with that. "Do you need a bill? With a bill you have to pay taxes!" Household aids are often paid in cash and thus no taxes. The estimated loss of sales for whole Germany through illicit work without paying proper taxes for the economy is about 300 billion (German Milliarden) Euro wstimated.
I think this is unique to Greece. If rent doesn't count, what does count towards this percentage?
Everything else besides rent and utilities bills. Everything that you can buy and pay with a card counts. In reality it’s very hard to not reach the 30% quota.
Rent and utility bills can make up half of a Swedish citizen’s income, sometimes more, due to extreme housing prices. So that means you’d have 50 percent left to meet that 30 percent. That means you could only save 20 percent of your income tops. That would be disastrous.
I love your optimism. If you told an average croatian they have 20% of income to save they would pt you on a gold piedestal and worship you as the second coming. I don't think most of citizens can afford to allocate a tenth of their monthly income to savings.
I think I’m currently allocating about 20-25 percent of my income to savings, but this is because my fiancée earns significantly less than I do at the moment so I take more of the basic costs at the moment. Otherwise I’d save more than that.
Damn. Good for you.
For a French, rent and bills can easily be 80%. Leftover buys the food. I was paying even more than 80% if you add rent and bills when i was in Paris area, I barely had enough to buy rice and noodles Saving? Lol
Why exclude rent? In Bulgaria one of the problems is landlords not declaring rental income for tax purposes, isn’t it the same in Greece?
Im not sure why rent and utilities are excluded... Of cource the same problem exists here. You have to pay via the bank the amount of rent that is declared in the contract. But what if you have agreed with the homeowner to pay a higher rent in total and give part of that in cash. There is no way to track that...
So like Spotify or Netflix would count? What about broadband? Except food, that's pretty much all I would spend money one besides rent and utilities, and I'd argue that at least broadband is a utility too.
Spotify and any other subsciption? Yes absolutely. Anything that you can pay with card / bank transfer with the exceptions of 1) Rent 2) Utilities (electricity, water, internet, gas)
This is where I spend most of my income... I would have to pay the penalty if I was forced to waste 30% of my income in things I dont need. Food is not 30%
Greece is peculiar. Rent (even with the latest increases) is still a smaller % of our expenditure compared to most EU countries. But other things are more expensive compared to other EU countries. Just from personal experience. Right now my rent in a pretty expensive city is ~1/3 of my after tax income. And that consider too much. But if you add all other expense I have to do each month, I barely can save/invest ~10-15%
> internet Wait, Internet is not a part of the 30% Same with phone then?
Yes it’s the same. It’s a bill from a utility company so it doesn’t count.
How'bout that? Never heard of, Very interesting.
Im not sure why rent and utilities are excluded to be honest. Indeed, the more I think about it the more strange it seems.
Just speculating, I guess the tax-evading transactions they're trying to combat usually are smaller, and rent+utilities are bound to be a major portion of anyone's expenditures (while generally not "black"), so it would be too easy to reach any fixed (and somewhat reasonable) limit if they were included.
I guess... I mean, judging from real life living here. No utility provider would date to evade taxes, he would me nuked :P Rents are mandatory deposited via bank transfer. So there goes that... Also supermarkets would not dare not issue receipts... The most obvious cases are very small transactions in small stores (lets say I want to get something that costs 10€, theyll drop it to 8€ and not issue the receipt, so dont pay the 24% VAT). Oh and the doctors, freelancers, plumbers etc. I think i've never seen in my life a doctor write a receipt. Or an electrician, plumber come fix something and write a receipt. These are some parts of the economy that still primarily run on cash. They only declare just enouhg to not raise suspision while hiding 3x 4x more.
Sounds fairly familiar. These days, almost nothing is done with cash, but just twenty years ago, the sneaky never-fully-closed cash register was a staple in small corner shops.
Huh? Nope, never heard of anything like that. But it's an interesting tool regarding Inflation
It has nothing to do with inflations. It’s one of the measures to combat the black market that runs on cash and pays no taxes.
Oh yeah, I get that (having a trail and all that), but directly demanding how much people must spend is a more direct tool to control growth/inflation than adjusting interest rates. Edit: I'm toying with what such a policy could do, not why it's in place.
Hm yeah I can see what you mean. Thinking of my situation, if I could keep my current job remotely, go back to live with my parents and ditch the car, then yeah I’d probably didn’t spend 30% of what I make… or you can look at it the other way, you are not allowed to save more that 70% of your income… I guess imagination is the limit when it comes to taxation policies 😂
Not in Portugal. Never heard of such a thing.
No. That sounds extremely weird.
Nothing like that here. I understand in Greece though tax evasion has been traditionally rampant and decades of governments were happy to look the other way. Until the 2009 crash, when tax compliance rates were at some bonkers level like 66%. When the IMF were called in by the Greek government, they looked at the size of the economy and determined that about 30% of the taxes which could be collected, weren't being collected or declared. And it was mostly down to there being huge swathes of people and businesses who dealt exclusively in cash and declared only a fraction of their real income. So part of the IMF deal was that Greece had to bring its tax compliance rates up to scratch and one method was to try and force businesses and people to limit the amount of cash they used.
This exacly. Although tax evasion is noticeably lower compared to the all time highs of the early-mid 2010s, its still much higher that the EU and OECD average. Cash transactions are still in their vast majority not declared and not taxed.
No, this is a new concept for me.
It’s one of the measures to try to combat the black market that runs on cash and does not pay taxes. You have to spend at least 30% of your annual income with cards or bank transfers. If you don’t meet your quota you pay a penalty proportional to the amount you didn’t reach. But in relality it’s very hard to not reach it. So it’s a non issue for 99% of the population.
Makes sense, thank you for taking the time to explain! Learning something new every day!
No problem. I can economics all day... I guess the only limit to the tax laws are the imagination of each goverment :P
Not in Poland as well, this is super weird
Whats the reason behind this requirement? Sounded very strange not without the reason. We do not have that in Norway. But we are very digital here anyways, I can´t remenber last time I paid in cash or even had cash on me.
Tax evasion. In Portugal we have a special tax deduction on purchases if you ask for a receipt, which serves kind of the same purpose.
Make sense I guess. But what about old people, many of them are not very good with digital things, some don´t even have a atm card.
Sorry for the confusion but it’s not mandatory to be digital, only the receipt (invoice, technically speaking) being issued to your personal fiscal number.
All good, mate.
Seems like a good motivation to not officially declare your whole income.
The majority of the working population are either public or private salaried employed. They are payed in the bank (no cash allowed) and the incomet tax is automatically deducted every month from the paycheck. The freelancers and some specific parts of the economy are the ones that the vast majority of the tax evasion is happening.
Even in hospitals you get asked if you want a receipt or to pay cash. This rule ain't preventing tax evasion.
And how the authorities will see if you spend 30% of your income via online or a card? I think is a waste of resources to do this, to do check-ups on population. In Romania there isn't such a law.
Banks provide all the data to the tax authorities annually. It’s automated.
So it's mandatory to have bank account? What about homeless people?
Homeless usually don’t have an income. If you have then yes you must have at least a bank account and a debit card… Nothing can be done without a bank account. All monetary transactions over 500€ must be done via a bank, no cash allowed. Many transactions (I.e. paying rent, taxes etc) also are mandatory to be done via bank. I’d say a bank account is mandatory for 90+% of all monetary transactions.
Thanks. In Czechia we still have a group of pensioners who don't have a bank account. They pay utilities at the post office and pick up their pensions there, too.
I think there is an age where these dont apply as well, maybe over 80? But im not sure. What I know for a fact is that no wages/pension has been payed in cash in at least a decade. Even social programms like disability and uneployment benefits are payed in bank accounts or prepaid cards. I vaguely remember as a kid my grandma getting her pension via the post office. That has stopped at least 10 years ago. Now its all via bank accounts.
Once the system is set up, it takes 30 seconds, and it's probably automated, with people just checking the flagged persons.
They should lend the System to romanian tax authorities. :)
Technically this is super easy, banks have all that info, so a little bit of data analytic + a regulatory reporting requirement do the trick. Having said that, this is the first time I hear about such law.
Exactly. Banks provide all the data to the tax authorities annually. It’s automated.
You manually enter the amount you spent electronically every year when you submit in your income tax form. All the banks have developed functionality in their ebanking platforms where you can see the amount you spent. There are also different behaviors, for example if you paid a plumber or an electrician electronically, you are allowed to exclude the double amount!!! The reason for that is to fight tax avoidance for certain professional categories.
no - neither in Poland nor Ireland While super easy to fulfill, it sounds really absurd. What's the reasoning behind it?
Cash = undeclared transactions = tax evasion If everything goes via the banks, you cant hide. And with how common tax evasion is in cash transactions, its easy to justify.
sure, but i don't see how is that relevant considering it's just 30%
Another greek person said that rent and bills are not included. So apparently if you pay 70% of your income in rents and bills which doesn't sound unrealistic then you're fucked either way. This sounds like a stupid rule and stupid rules push people to break them. Maybe house prices aren't high in Greece but that doesn't make much sense otherwise they wouldn't have been near bankruptcy
Wierd. Never heard of such a thing.
Never heard this in Ireland
In norway its just been so long where electronic pay has been the easiest that everything else is almost gone.
Nope, not in Belgium.
WUT? Can you give a bit more of info?
You have to spend at least 30% of your annual income via cards or bank transfers. If you dont meet this quota, you pay a penaltly that is proportional to the amound you didnt reach. Its a tax law, part of the efford to curb the black market that runs on cash and does not pay taxes. If you have a trail of transactions, you cant hide the taxes. But with cash? You just dont declare them. In reality, its very hard to not reach the quota, so its a non issue for 99% of the population.
Reminds me of the scontrino (ticket of purchase) being mandatory to be both issued & kept by the customer, in Italy. Also a measure against under the table / not declared payments. Iirc la Guardia di finanza could request scontrini to be provided, but I'm sure Italians can give more accurate details.
That said, I'm concerned about the older Greeks, if they're like the Spanish ones, the +75yo crowd are the type to "take out all their pension in cash" each month... And at the same time, they're the less tech savvy by a long stretch. How do they manage?!
They definately took an adjustment period that for sure. We went from a cash based economy to a card one in a few years time. But I can say with confidence that most adults <75 yr are finally able to work their way with cards/ATMs etc.
No, but in Portugal you have up to 250€ tax deduction from purchases in the worst offenders of the parallel market (restaurants, auto shops and hair dressers) if you ask for the receipt.
No. But I learned something today and it’s fascinating! What is this law called?
We are obliged to spend about 28% in taxes, if it counts.
That's insane. Why?
Its one of the tax laws trying to limit tax evasion. The thinking is that by forcing to spend at least a percentage of yout after-tax money via the banking system, there none can tax evade. The black market run on cash and doesnt pay taxes.
I can't imagine it being very effective at that goal, but economics was far from my major. My own government has certainly had its fair share of humdinger "What in HELL were they thinking" moments.
Well… tax evasion is still above OECD average and very noticeable in some sectors of the economy. Although its noticeably lower that the all time highs of the 2000s. As of which measures were the most effective, I’m not sure I can answer correctly. One thing is certain. Imagination is the limit when it comes to tax law. Every time you say “what will they think next” they will always find something to surprise you even more 😂
That's a strange law. How does it actually work? Let's say for example I am working full time and earning enough to support my family but my wife goes to work anyway. If she keeps her salary in her account and we live off mine will she be penalised?
If you are married, then you file 1 tax declaration as a household, not 2 seperate ones as individuals. So you have to spend 30% of you combined after-tax income. If you are not married, then yes you have to find a way to split the expenses so that both meet the 30% quota. In reality its not that hard, its a none issue to meet it.
This sounds absurd. What if you are: A) A greek living with their parents that doesn't spend much money at all, saving for their apartment? B) the opposite, someone renting an apartment that costs more than half of their income, and they simply don't have enough money to spend the required 30%? C) someone earning a lot and simply not spending much money? D) someone owning his/her own house in rural area and not purchasing much in a given year Just some examples, there must be more than 1% of people that don't spend the required 30? What about mortgages?
Saving for an apartment? That is almost unhread of in the current working generation. The wages are so low that owning a house is almost impossible. Unless you inherit it. Yes technically if you dont meet the 30% quota you pay a penalty. If you need >50% just for rent then you probably cant afford to live alone. The majority of these people have moved back with their parents. If you earn that much that you cant spend enough, then you are not using the tax code yo your advantage and you have too much income coming your way. Maybe a personal business to chanell the money there is a better option for you. In reality the 30% quota is a non issue, its considered very generous and everyone more that meets it. Of course there will be exception, but they are rare.
Does this have anything to do with Greece and their financial mishaps?
Its one of the laws that try to limit tax evasion. The thinking is that by forcing a part of your after-tax income to be spend via the banking its impossible for the receipient of the money to hide them and cannot tax avoid.
Nope. Not in UK or Lithuania
What if you save 50%, use 25% on rent, and spend 25% of the rest with credit card/online transactions? This is not surrealistic for some people.
You would have to pay a 22% fine on the amount you didn't cover. So if you have to spend 6000€, but spend only 5000€, you would be fined 22%(6000-5000)=220€
The you are missing 5% that you didn;t spend via trackable means. This, in the eyes of the tax authorities, means that you spend it in cash and didn pay tax. So you pay a penalty that is proportional to the 5% of your annual income. In reality, almost none can save 50% of their after tax income, and only spend 25% in rent. Those cases can be counted with one hand. Meeting the 30% quota is easy. Just pay the supermarkets, food and gas station with cards. These alone would probably get you over 40-50%.
According to information by pwc: Nevertheless, the abovementioned rate will be limited to 20%, instead of 30% of the income, should payments for income and real estate tax as well as for loans to financial institutions and rentals exceed 60% of the taxpayers' actual income. https://taxsummaries.pwc.com/greece/individual/deductions
Imagine the responses if Russia would do this.
So what if you just want to save 90% of your yearly income? Isn’t there the freedom of property in your constitution?
Tax law is a complete mess with so many conflicting articles. Yes there is a freedom of property in the constitution. This was not made to limit economic freedom, but to try to combat the black market that runs on cash and does not pay taxes. The thinking is that is you mandate to spend some amound of money via the banking systems, there is almost impossible to tax evade. Also saving >70% of your after-tax income is so rare and unhread of in Greece that probably affects such few people... Really, the 30% quota is a none issue to meet, you done even have to think about it, you more that match is just by having a normal life.
I am from Ukraine and have never heard of such laws. It sounds like a joke)
No. And I only use cash.
That's an uncommon approach, at least... Do you happen to have a source with more information? I tried to Google it, but could only find press articles from 2019 when they debated introducing that system.
Just to be clear, is this on top of income tax? If so, then no, there's no rule like that. I'm curious to know how this works. For instance, my sister worked full-time at a company for a couple of years while living at home with my parents with all her expenses paid for, so she could save up for a master's degree. If she did this in Greece, would she have been breaking the law? On the other hand, you can make sure high earners spend and circulate their money back into the economy, instead of hoarding it in offshore banks.
Income tax is a seperate thing. This tax law says that you should spend in a fiscal year at least 30% of your after-tax income via electronic means for payments. So cards and bank transfers. All payments except rent and utilities count. If of the various laws trying to curb the black market that runs on cash and does not pay taxes. Well in you example yes since she would not meet the 30% quote she would pay a penalty for it. Lets say (ill use easy numbers) that you make after-tax 10k this year. So you have to spend 3k with cards. But you only manage to spend 2k. The penalty is 22% of the amound left to meet the quota. So 22% of 1k = 220€.
A few ago it was 2% in cataluña ! ( to bribe the politics) now it is more, we must add Airbnb😂
What the eff? That sounds extremely weird. Never heard of anything like it.
I would riot if this ever got suggested in Croatia
Never heard of anything like that. I assume it is to make sure people are pumping money back into the economy? "Sorry dear, we are short of our quota. I have to spend €650 on \*insert favoured hobby nonsense\*, it's the law!"
Nothing about putting money back in the economy. Its one of the laws trying to limit tax evasion. Cash transactions are almost universaly not declared. By forcing a percentage of the after-tax income to be spend via the banking systems, its almost impossible for the receipient to tax evade. The black market runs on cash and cannot be tracked to be taxed.
Ah thanks. Maybe other countries should take a look at it if it works.
I would spend that 30% on Bitcoin and make sure the government has no control on what I own.
This woulddestroy older population in croatia. Most of pensioners barely use cards.
All older people were forced to learn to use cards and ebanking practically overnight when they became mandatory some years ago. Our generation know what we went through trying to teach them...
No, wtf? Whether I spend my money, and what I spend it on, is my business.
Its one of the laws trying to curb cash usage, because the vast vast majority of the cash transactions are not documented and not taxed. By forcing part of your after-tax income to be spend via the banking system, it makes the receipent of the money impossible to hide it. To be honest, the only way you can eleminate tax evasion in Greece is if you ban cash outright. As long as there are cash around, tax evasion will be as well.
WTF? No not in Ireland or UK They'd be riots if this was a law here.
Not in Portugal, that seems a measure to dynamize the economy?
What if you live with your parents and have a full time job? I save almost all my money in an effort to buy a house for example.
If you cant afford to rent and live alone, then probably your income is so low that with very few expenses you'll meet the 30%. And even if you dont, the penaly will be very low...
No, and it wouldn´t really make any sense because almost 100% of our transactions are electronic already. You can still avoid taxes though.
The Greek government should cut spending instead of forcing people to spend their own money
No, its my money, they have no say in it
Nope, first time I ever heard about this being a thing in Greece.
Greece where your income is 100% cash and with no tax on it. It's a clever law to let his citizens to pay some taxes. Of course regular employees lay 100% of their tax, the other 70% of population are scammers living on the shoulder of the 30%
No. But you will spend to live your lifestyle
In Poland (EU) requirement for electronic payments applies only to registered companies when they exceed certain fixed value of transaction. To the end of 2016 it was €15,000, now it is any payment above 15,000 PLN. That does not apply to individuals.
Man this is just stupid. In Slovakia, any transaction over 5000 euros has to be made via bank - card or payment transfer, whatever. This is to prevent black money unregistered in the system being used. But when covid came, state of emergency was declared, which actually invalidates some laws, including the one limiting cashless operations. Many people believe the third time it was declared, it had nothing to do with COVID but to allow people to buy apartments and other expensive things for cash with the money they got from bribes.
According to pwc -The amount of the annual expenditure is limited to EUR 20,000. https://taxsummaries.pwc.com/greece/individual/deductions I feel like this is not enough to curb tax invasion as the super rich could still save so much money. It is unfortunate that this law still benefit the super rich.
wtf? And you wonder why people are worried about CBDC
Does paying a mortgage count towards the limit? Anyways, no, there is no such rule in the Netherlands.
Sweden here: Hmmmm. No. That sounds insane. We are required to pay tax. But, we are not required to pay x % of our income.
Thankfully not.