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VAT Rate Reduction in the Greek Islands

From January 1st 2026 will come into effect a 30% reduction in VAT rates in the Greek islands!

Greece

From 1.1.2026, the 30% reduction in VAT rates on the islands comes into force, in accordance with article 26 of the VAT Code (Law 5246/2025). From 1 January 2026, an extension of the 30% VAT reduction is applied to Greek islands with a population of up to 20,000 inhabitants, strengthening the local economy and reducing the cost of living. The reduction concerns goods, services, branches and imports to the specific islands.

The reduction applies:

  • On the islands of Lesvos, Kos, Samos and Chios, provided that immigrant reception structures are in operation
  • On the islands of the North Aegean, Samothrace and the Dodecanese islands with a population of up to 20,000 inhabitants

Exceptions: Reduced VAT does not apply to:

  • Tobacco products
  • Means of transport

Goods: Reduced VAT applies when

  • The goods are located on the island and the seller is established there
  • Shipments from the rest of Greece are subject to reduced VAT only if the buyer has a permanent establishment on the island
  • Sales to individuals from the rest of Greece are not subject to the reduction

Services: Reduced VAT only applies if:

  • The provider is established on an island with reduced VAT and
  • The service is performed on a corresponding island

Imports: Reduced VAT applies only when customs clearance takes place on the island and the importer is established or permanently resident there.

Which islands are included in the AADE circular:

It is noted that the 30% reduction in the current VAT rates (24% to 17%, 13% to 9%, 6% to 4% and 4% to 3%), according to data received from ELSTAT, applies restrictively to the islands included in the circular. Among the islands included in the circular are: Agios Efstratios, Astypalaia, Ikaria, Kalymnos, Karpathos, Kasos, Lipsi, Leros, Megisti, Nisyros, Patmos, Symi, Psara, Tilos, Fournoi, Agathonisi and Chalki.

How much is the VAT reduced: From January 1st, the following will apply to all 24 islands:

  • VAT 17% instead of 24% for most products and services
  • VAT 9% instead of 13% for certain categories of goods
  • VAT 4% instead of 6% where the super-reduced rate is applied or
  • VAT 3% where a rate of 4% is already applied