Self-employment

Self-employed professionals like engineers, lawyers etc, are pinning their hopes on a decision by the Council of State to see some relief from huge social security contributions, which, coupled with taxes, consume around half their incomes.

Greek companies reportedly pay five times the amount in contributions and taxes for the same turnover as their counterparts in Cyprus.

The huge gap in contributions has reportedly prompted thousands of self-employed professionals (engineers, doctors, businessmen consultant, accountants and others) to set up offices in Cyprus and move their base to the Eastern Mediterranean island.

Salaried workers and self-employed Greeks who started working from January 1993 onward now have to pay a 4 percent contribution from their income toward the Unified Supplementary Insurance and One-Off Benefits Fund (ETEAP), according to a circular issued on Tuesday by Deputy Labor Minister Tasos Petropoulos.

A circular issued on Friday by the Labor and Social Security Ministry, intended to clarify the social security contributions of self-employed professionals, introduces changes that will likely result in income reduction and even loss of work for some 250,000 people paid through invoices for services rendered (known in Greek as "blokaki") by up to two employers.

Labour Minister Giorgos Katrougalos admitted in his article published in newspaper Avgi that his plan on social security reform confiscate the income of certain classes of self-employed while adding that the social security bill leads to “unfair results” adding that even “the fairest rules can be reviewed and corrected”.

The Greek government examines the insurance and tax burden of self-employed to achieve a threshold without overturning the actuarial balance of the new insurance law.

Over one million of self-employed are on high alert after the announcement of changes in the social security contributions according to the new draft law on social security system reforms.

Even those who declare a 20,000euros annual income, they will be called to pay higher contributions to the insurance organization for the self-employed (OAEE).