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The new tax law foresees more favourable provisions with regard to freelancers in the first three years of their work; those who work under a civil contract for one employer, as well as increased allowances for large families. It is also foreseen that tax returns will require taxpayers to describe all their incomes, including interest on deposits. These changes became clear after yesterday's five-hour meeting of the inter-party committee, in which, in addition to representatives of the parties, Finance Minister Yiannis Stournaras and Deputy Minister George Mavraganis also took part. The bill will be submitted to Parliament by next Tuesday and on 13 December, at the meeting of the Eurogroup, the Finance Minister will be prepared, since the main requirement of the Troika includes changes in taxation of individuals and legal entities.

Yesterday, the inter-party committee took the following decisions:

* Large families' allowances to be increased from 450 to 500 euro for each child after the third.

* All incomes to be declared in the tax return in 2013, including those which have already been levied, such as interest on deposits.

After the pressure of government partners, the leadership of the Ministry abandoned its initial ideas for the taxation of freelancers. Thus, those who work for only one employer, will not pay a licence fee as of 2013, but their incomes will be taxed on the scale of those employed under a labour contract and pensioners. This year's fee amounts to 500 euro and is obligatory for everyone.

At yesterday's meeting, it was also decided that young freelancers will be taxed for the first 10,000 euro by a 13% factor for the first three years of work, regardless of their age, and above this amount, the factor which applies to freelancers will be used, i.e. 26% for amounts of up to 50,000 euro and 32% for amounts exceeding 50,000 euro. Moreover, the fee for companies' branches will be doubled from 300 to 600 euro.

Further consultations are expected until the law is finalised. The Democratic Left insists that rental incomes should be taxed under a scale, freelancers should be taxed by a factor of 21% for incomes amounting to 20,000 euro, and by a factor of 33% for incomes above that amount, in order to save 25 million euro; they also want a factor of 45% for incomes above 100,000 euro (meaning 25 million additional savings), and the tax rate for interest income not to be increased from 10% to 15%, as proposed by the Ministry, but to 17.5%, which will lead to another 135 million euro savings.

As of 2013, non-taxable amounts for children will be removed, which currently amount to 200 euro for 1 child, 4,000 euro for 2 children, 7,000 euro for three children and 10,000 euro for four children. These amounts will be replaced by family allowances. They will amount to 40 euro a month for the first child, 40 euro for the second child, 50 euro each for the third and fourth child, and 60 euro for each child after the fourth. These amounts are given entirely to families with annual incomes of up to 10,000 euro, 2/3 of the amount - to families with incomes between 10,000 and 20,000 euro, and 1/3 of the amount - to families with incomes between 20,000 and 30,000 euro.

Thus, 150,000 families with many children who have so far received allowances for families with many children amounting to 528 euro per child per year, under the new regime will receive 500 euro per child for being a family with many children, and 40 or 50 euro a month additionally, depending on the number of children. For example, a family with three children and a taxable income of 33,000 euro net, with no deductions to third parties, will receive 2,910 euro per year - 1,350 euro for being a family with many children (450 euro for each child) and 1,560 from child benefits (40 euro for the first and second and 50 euro for the third child), instead of the 1,584 euro (528 euro per child) received currently.

Those who will be the most favoured also include:

* Families with family income of up to 24,000 euro and one child

* Families with family income of up to 21,000 euro and two children

* Families with family income of up to 23,000 euro and three children

* Families with family income of up to 15,000 euro and four children

The annulment of tax exemption is not taken into account, however, which will undoubtedly reduce the effect of the above changes and will additionally burden families.

Significant burden will be put on about 800,000 freelancers who are not young and receive incomes from more than one employer.

The new tax law provides for:

* A 100% increase of licence fee - from 500 to 1000 euro

* A 30% increase of licence fee for craftsmen – from 500 to 650 euro

Additional burden is not limited to increased licensing fees, the scale of their taxation will also be changed:

* Taxation factor of 26% for incomes of up to 50,000 euro;

* Taxation factor of 32% for incomes exceeding 50,000 euro.

Large companies are the most favoured because taxation for them will be reduced from 40% to 32.8%:

* Taxation factor of 26% for all profits;

* Taxation factor of 20% for dividends.

According to the draft, the new tax will suggest losses for:

- Those employed under a labour contract and pensioners without children with a personal income of more than 25,000 euro. Those who have an income of below 25,000 euro will not gain anything because the beneficial effect of the new tax scale is offset by the cancellation of the majority of exemptions, such as reduced interest on mortgage loans for the first home, rental costs for main residence and others.