Greece's Ministry of National Economy and Finance published a speech by Deputy Minister Giorgos Kotsiras outlining a structural tax reform package expected to apply largely from January 2026, spanning pension-related tax and indexation changes, a recalibration of deemed living expense rules for households, and targeted indirect tax relief for smaller border islands. The package also includes the abolition of the subscription television levy, adjustments to the minimum presumed income framework for self-employed individuals, and tax exemptions for foundations, bequests and related donations. For pensioners, the speech set out a reshaped income tax scale from January 2026, a permanent EUR 250 payment each November, and annual pension increases linked to inflation and GDP from January 2026, estimated at 2.35% under current macroeconomic forecasts. The partial offset of pension increases against the “personal difference” would be removed from January 2026, with the offset abolished fully from January 2027, and the solidarity contribution for working pensioners would be calculated without counting the pension uplift attributable to employment. Deemed living expenses would be reduced and redesigned, including a 30% base reduction for homes, exclusion of dependent children with their own income from the EUR 3,000 minimum objective expense, and a shift for cars registered after 1 November 2010 from an engine-capacity model to a CO2-emissions model aligned with circulation tax bands; for zero-emission vehicles, the deemed expense would remain EUR 0 up to a pre-tax retail price of EUR 50,000 and fall to EUR 2,000 above that threshold. A 30% VAT reduction would be extended from 1 January 2026 to islands in the North Aegean, Evros and the Dodecanese with a 2021-census population up to 20,000, in addition to the five islands currently covered (Chios, Leros, Samos, Lesbos and Kos), while the subscription television levy would be abolished from January 2026.
Ministry of National Economy and Finance (Greece) 2025-09-08
Greece's Ministry of National Economy and Finance sets out 2026 pension and tax package cutting deemed living expenses and extending 30% reduced VAT to small Aegean islands
Greece's Ministry of National Economy and Finance announced a structural tax reform package effective January 2026, including pension-related tax changes, recalibrated living expense rules, and targeted indirect tax relief for smaller border islands. Key measures involve reshaping the income tax scale for pensioners, abolishing the subscription television levy, and extending a 30% VAT reduction to additional islands. The reform also adjusts the minimum presumed income framework for self-employed individuals and provides tax exemptions for foundations and donations.