How to calculate the special solidarity levy and who is exempt


Since 2010, Greek taxpayers are required to pay an extraordinary solidarity levy every year, in addition to their income tax, based on their income. This measure was adopted in the context of the memorandum commitments undertaken by Greece, for the purpose of serving the public interest.

The case-law has consistently held that the tax in question is indeed a tax, but not on the income on which it was levied. In the opinion of the legislator, these incomes were considered to be the safest base for diagnosing the taxpayer's ability to pay. This reasoning has dismissed taxpayers' complaints about unconstitutionality, etc. of the extraordinary levy.

Already with the new Income Tax Code (L.4172 / 2013), the so-called "Special Solidarity Levy" (SSL) is scalable to incomes over €12,000 as follows:

For incomes of:

  • 12.001 euros - 20,000 euros: 2,2%, 
  • 20,001 euros - 30,000 euros: 5,00%, 
  • 30,001 euros - 40,000 euros: 6,50%, 
  • 40,001 euros - 65,000 euros: 7,50%, 
  • 65,001 euros - 220,000 euros 9.00%, 
  • amounts over 220.000 euros:10.00%.

The levy is levied on the total income of the taxpayer regardless of its source, that is, income from paid employment and pensions, business activity, capital, goodwill, capital transfer, etc. It also applies to income that is exempt from income tax, whether real or imputed.

Exceptionally, the SSLs are not levied on (a) persons who are totally blind and with severe motor disabilities, (b) compensation for the termination of the employment relationship, (c) long-term unemployed and those receiving unemployment benefit, income.

For married couples, the liability for a contribution corresponding to their income is calculated separately and the responsibility for the payment is borne by each spouse. In the case of employees and pensioners SSLs are withheld by the employer or the pension provider.

It should be noted that the contribution is calculated on the total gross income of the taxpayer, that is to the amount of income before the deduction of the corresponding income tax. Thus, an employed or self-employed person with an annual taxable income of:

  • €40,000, is subject to income tax at an average rate of 27.5% plus 3.32%, i.e. it is ultimately taxed at 30.82%.
  • €60,000, is subject to income tax at an average rate of 33.3% plus 4.71% of ESA, i.e. it is ultimately taxed at 38.04%.
  • €80,000, is subject to income tax at an average rate of 36.25% plus 5.69%% of ESA, i.e. it is ultimately taxed at 41.94%.

Obviously, the larger the taxable income of a taxpayer, the greater the charge on the levy.

Apart from the above, an employee or pensioner must also take into account that in order to be entitled to a reduction in the tax on account of children but also in order not to pay an increased tax, one must annually incur the costs of acquiring goods and receiving services, paid by electronic means of payment (credit / debit cards, etc.), the minimum amount of which is determined as a percentage of taxable income, scalable as follows:

For income: 

  • up to € 10,000, a 10% expenditure, 
  • from € 10,000 to € 30,000, a 15% expenditure,
  • up to € 30,000 or more, a 20% expenditure (with a ceiling of € 30,000).

If it does not cover the minimum amount of expenditure required, an additional tax of 22% of the difference between the required amount and the declared amount of costs is imposed.

In this context, an employee with a gross salary of EUR 50,000 pays (approximately) EUR 8,000 to the Single Social Security Entity, EUR 10,200 for income tax and EUR 1,500 for SSL. 

Essentially, the employee actually receives about 30,000 euros. Of these, the employee has to spend electronically EUR 6,400 in order to avoid additional tax. 

Similarly, an employee with a gross salary of 80,000 euros receives just about half and has to spend about 11,400 euros.

G. Samothrakis, J. Panou
Posted on Sunday newspaper, KATHIMERINI, on 29/01/2018.

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