Under the new guidelines, the 42 percent top tax rate and earnings threshold replaces the previous level of 45 percent for incomes above €100,000 ($130,770). The new rate is part of a simplification of the country's tax rules. There are currently eight tax bands ranging from 18 percent to 45 percent. These will be replaced by three tax rates: 22 percent, 32 percent and 42 percent.
Greeks earning less than €25,000 ($32,700) a year are set to benefit from the new system in spite of the raise in the basic tax band as the government is proposing to raise the threshold on which income is taxed.