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Residency:Any person living in Greece permanently or regularly (upwards of 183 days a year) gets taxed for their worldwide income, in accordance with the relevant double taxation treaties. Residents that are liable to pay tax on their worldwide income to a country that hasn’t signed a double taxation treaty with Greece are only taxed on their Greece-sourced income for three consecutive years.

 

Income: Taxable income is any income that derives from any of these sources: Real estate income, income from non-fixed values (stocks, loan interest etc), trade, agriculture, employment and independent labor. Depending on the type of income there is a different regime, but since 2010 almost all types of income are taxed based on the income tax scale.

 

Taxation: Individual taxation is calculated based on the following scale:

 

Income Scale
(in euro)

Tax Rate%

Scale Tax
(in euro)

Income Total (euro)

Tax Total (euro)

5.000

0

0

5.000

0

7.000

10

700

12.000

700

4.000

18

720

16.000

1.420

10.000

25

2.500

26.000

3.920

14.000

35

4.900

40.000

8.820

20.000

38

7.600

60.000

16.420

40.000

40

16.000

100.000

32.420

Over100.000

45

 

 

 


There are a few mitigating factors that raise the untaxed income, such as being under 30 years of age, having children et al. In order for the above scale to be applied, receipts for at least 25% of their income must be attached to the tax return. Otherwise there is a considerable tax penalty.

 

Exemptions: Certain expenses lower the payable tax. For most of these expenses the amount of deduction cannot be over 20% of the expense. From 2012 the deduction will be reduced to 10% due to strict IMF regulations. These expenses include rent, hospital and medical bills, private tutoring, housing loan interests, life insurance and more.

 

Payroll Tax:Payroll Tax is withheld and paid by the employer for every person on the payroll, according to the income tax scale, every one or two months depending on the company size. It is based on the individual’s yearly net income, after subtracting the mandatory social security (16,5%) payments, and it is further discounted by 1.5%.

 

 

Taxexperts Tip: Big companies are considered those with more than 50 employees

 

 

Corporate Tax:Almost every source of income for corporations is considered taxable, after the subtraction of any deductible expenses etc. Deductible expenses are defined as those expenses that are necessary for the organization to generate profits. The tax rate is 20% for all types of companies regardless of their size or annual turnover. Note that income from dividends and shares is taxed independently and are deducted from the total tax due.

 

 

Taxexperts Tip: Corporate tax planning is essential in Greece

 

 

Property Tax:Properties are taxed based on their objective value. Objective values are defined by various factors such as building surface, year of construction, area etc. They are generally about 30-50% lower than a property’s actual market price. For individuals the tax is calculated according to a scale similar to the individual income tax scale, with rates ranging from 0.2 to 1%.

 

For corporations, the property tax rate is 6‰ except for property that is being used in the corporation’s productive procedures, in which case the rate is reduced to 1‰. The property tax cannot be lower than 1€ for every square meter. Notable exceptions are hotels. Those get taxed with a 0.33‰ rate until 2012 and the 1€/m2rule doesn’t apply

 

 

Taxexperts Tip: Using a foreign company as the owner of a property is the way to go

 

 

VAT:Greek Value Added Tax rate is 23% for most goods and services, including property purchase and sale as long as the property was built after 2006 and it’s being sold for the first time. There is also a reduced rate of 13% for food, medical equipment, hospitality, tourism services etc. The lower rate of 6,5% applies to very few goods like books, drugs and newspapers. For some islands of the Aegean Sea, all of those rates are further reduced by 30%.

 

 

VAT is filed and paid quarterly by partnerships with ‘B-Class’ books and monthly by corporations with ‘C-Class’ books. At the end of the year a VAT Reconciliation form also needs to be filed. Intra-European Union transactions are exempt from VAT but they still need to be declared, both in VAT forms and to the VAT Information Exchange System (VIES). VIES forms are filed each month regardless of the books’ Class.
 

 

 

Taxexperts Tip: VAT Representation is cost effective for commercial companies

 

 

 

Dividends:Dividends are taxed at a rate of 25% of their value. They are taxed independently from other sources of income, and they don’t count towards a person or corporation’s taxable income. Note that in the case of a subsidiary with a parent company outside Greece there is no tax on dividends if the parent company owns the subsidiary for at least two years.
 

 

 

 

Taxexperts Tip: There is no dividend tax when a company withholds dividends for investments

 

 

Interest:All interest for loans is taxed independently from other sources of income. The rate is 10% for Greece-based individuals and corporations. When a Greek company is paying interest to a foreign lender, the tax being withheld is up to 40% depending on the Double Taxation Treaty with the destination country. Some interest-sourced income is tax exempt, such as interest that derives from deposits in foreign currency, Greek Treasury bills and bonds owned by foreign investors.

 

 

Taxexperts Tip: Most treaties are reducing the withholding tax to 5%.

 

 

Royalties:Royalties are taxed independently with 25% during payment. When the royalties are paid to a foreign company they may get taxed with 0% or 10% depending on the Double Taxation Treaty with the destination country.  

 

 

Taxexperts Tip: When a Greek company is paying royalties to its parent company abroad, it needs to comply with the Transfer Pricing regulations.

 

 

Double Taxation Treaties:Greece has signed treaties to avoid double taxation with 47 countries including members of the EU, the USA and more. These treaties govern taxation issues between countries, define which income is taxed where, at what rate etc in order to avoid income being unfairly taxed twice.
 

 

 

Taxexperts Tip: Don’t forget that personal income of foreigners which is generated in Greece, will be taxed in Greece.

 

 

Capital Gain Tax/Capital Acquisition Tax:The tax rate for capital gains and acquisitions is set to 5% for SAs and 20% for other type of companies. The tax is calculated based on the fair value of the company and the value of the transaction. There is also a capital tax of 1% payable upon registering a company or offering new share capital.

 

For Mergers, Acquisitions and Corporate Restructures there are two different regimes with significant tax benefits for the shareholders as the transaction may be tax exempted under certain criteria.

 

 

Taxexperts Tip: During restructuring the tax benefit from the financial losses is not transferable

 

 

Transfer Pricing:Greece adheres to the arm’s length principle. However, the expenses are only deducted from their taxable income if the countries involved are members of the EU, or not in the annual list of non-cooperative countries. If a country from that list is involved, the taxpayer must present documentation proving that the transaction could not happen otherwise, that it is common practice and that it does not involve under-the-table movements of income.

 

 

Taxexperts Tip: Transfer pricing regulations are gaining more attention recently

 

 

Import Tariffs:Greek customs and duties are in accordance with the Harmonized Commodity Description and Coding System. The duties paid vary according to the nature of the goods, quantity, size etc.

 

 

Taxexperts Tip: Use our services for more details

 

 

Tax Calendar:

Financial andTax year starts the 1st of January and ends the 31st of December. Some sectors (ex. private schools) could be approved for a calendar year from the 1st of July until the 30th of June of the following year.

 

The most important dates are:

  • the 26th of every month for VAT Returns (Books Class C)
  • the 26th of every month for VIES Filings
  • the 26th every 3 months for VAT Returns (Books Class B)
  • the 24th of every month for Payroll Tax
  • End of April for Balance Sheets
  • End of May for corporate tax return filing
  • Income tax return filing dates are determined once a year but they usually end in June

 

There are several other filings regarding the social security.

 

Sources of Tax Law:

Income Tax: 2238/1994

VAT: 2859/2000

Books and Code: 186/1992

Download Greek Tax Guide



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Greek Tax Highlights
New Tax Rates 2013 - 2014
Corporate Taxation: 26%
Dividend Tax: 0 to 10%
VAT: 6.5% | 13% | 23%
Tax on Interest: 15%
Tax on Royalties: 25%
Capital Gain Tax: 20%
47 Double Tax Treaties
IFRS or Greek GAAP