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For the third time since the beginning of the financial crisis, Greece will increase its standard VAT rates. Once confirmed, the general VAT rate will increase from 23% to 24%, while the reduced rate of 6% on newspapers and publications may also be increased.
These changes have been proposed by Greek creditors including the European institutions and the International Monetary Fund. In 2010, the Greek VAT rate was 19%, at that point among the lowest in the European Union. If the announced rate increases are finally introduced, Greece will join the group of countries with highest VAT rates. These countries are Denmark, Croatia and Sweden, with a general rate of 25%, Finland´s VAT rate at 24% and Hungary with the highest rate of the EU at 27%.
Ever since the start of the financial crisis in 2007, almost all Member States have opted to increase their rates to compensate the decrease on tax revenues. Following recommendations of the European Commission and OECD, reduced VAT rates accumulated most changes, with the basket of goods subject to these rates gradually becoming standard rated items.