Tax-free limits for children eliminated from 2013

The time remaining until the tranche of December 13 will decide upon the changes to the new tax bill. It should be tabled in parliament on Monday, December 10, but it seems doubtful whether a bipartisan agreement will come earlier than that because after the political parties' reactions to the new tax bracket, the Finance ministry is returning to its original positions of last week.

The final draft of the government which Yannis Stournaras will present to the bipartisan commission on taxation - although the meeting was scheduled for today, it had not officially entered the minister's agenda until late last night and has apparently been extended for one day - includes the following changes:

- elimination of special tax-free limits for children

- tax deduction of 1,950 euros that will decrease as the income rises

- new tax scale at a median rate of 36% (instead of the 26% of the previous scale) and 45% tax from 48,000 euros upwards

- four-tier taxation for employees and pensioners, farmers, professionals and renters (the latter will pay nearly double than farmers and employees if they declare the same income)

- elimination of all tax exemptions without excluding mortgage interest

The Finance ministry will attempt to introduce special relief measures for families with 3 children, probably not by raising tax deductions but through an increased family allowance.