Taxation on Bonuses and Allowances Under New Reform

The new tax reform is expected to bring changes, as it provides for the taxation of income given in the form of bonuses, financial incentives, and allowances. This concerns income, profits, or other benefits, monetary or otherwise, provided through an office or salaried services.

According to Article 5, the following are taxed: the annual value of accommodation, any allowance, financial incentive for accepting employment, gratuity upon retirement, amounts from Employee Early Retirement Plans, compensation for termination of employment (excluding contractual), any other benefit under contract, and amounts receivable under court order.

Voluntary departure incentives, usually offered by banks and semi-governmental organizations, as well as successful retirement plans, are affected. The Ministry of Finance sets limits on these receipts, without affecting lump sums in the public sector and compensation from pension plans and welfare funds.

The level of taxation will depend on the scale of the taxpayer's annual income, and a tax rate of around 20% is also possible.

See the report by Kleio Vourkou.