30% reduction on VAT for new islands in 2026 Budget
As part of a sweeping tax reform in the Greek proposed 2026 budget, VAT rates on a range of Greek islands have been reduced by 30% to alleviate the cost of living crisis.
There is already a reduced VAT rate on a number of islands since 2021. But this is now extended to: Lemnos, Samothraki, Kastellorizo, Karpathos, Fournoi, and smaller islands in the Dodecanese and North Aegean.
The cuts will come into effect from 1 January 2026 of approved by Parliament.
June 2021: Greece extends island VAT cuts long term
The Greek finance ministry has announced that the reduced Value Added Tax rates enjoyed by Chios, Kos, Leros, Lesbos and Samos have been extended indefinitely.
As locations for refugee centres over the past years, plans to withdraw a holiday VAT rate discount enjoyed for years has been rolled over. The current postponement was scheduled to run out 30 June 2021.
Holiday island VAT cut ended by debtors
The reductions, equivalent to a 30% reduction on the 24% standard rates and the reduced rates, are now placed into effect until further notice. The withdrawal of the subsidy had originally been agreed between Greece and its debtors, the European Union, European Central Bank and International Monetary Fund.
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