Tax Compliance

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An Overview of Tax Compliance in Greece

The tax system of Greece can be overwhelming for many foreigners who visit Greece for work, to live, or retire in the country. You need to have the basic information about taxes in Greece before you decide to buy a property or start a business or move to Greece for work. Greece follows a progressive taxation system. Personal tax rates range from 9-44%. The rate of corporate income tax is 22%. Capital gains are generally included in the general tax bases. A standard rate of VAT is levied at the rate of 24% whereas 13% is applied to certain types of goods and services.

Types of Taxes in Greece

  1. Taxation of Individuals

In Greece, the tax residents are taxed on their worldwide income whereas non-residents are taxed on their income from sources in Greece. Tax levied on income is applicable at a progressive rate.

Rates applicable to employment remuneration, pension and commercial income:

Income

Rates

First 10,000 EUR

9%

Next 10,000 EUR

22%

Next 10,000 EUR

28%

Next 10,000 EUR

36%

Above 40,000 EUR

44%

Rates applicable to real estate income:

Income

Rate

First 12,000 EUR

15%

Next 23,000 EUR

35%

Amount exceeding 35,000 EUR

45%

Special contribution to solidarity is payable at the following rates:

Income

Rate

Up to 12,000 EUR

0%

From 12,001 – 20,000 EUR

2.2%

From 20,001 - 30,000 EUR

5%

From 30,001 – 40,000 EUR

6.5%

From 40,001 – 65000 EUR

7.5%

From 65,001 – 220,000 EUR

9%

Above 220,000 EUR

10%

This contribution was abolished for all types of income in 2020 except labor remuneration and pensions. In 2021, this contribution was abolished for private-sector labor remuneration.

  1. Income Tax

Corporate income tax is levied at the rate of 22%. Capital gains are included in the general tax base. Profits from the sale of shares in EU companies is exempt from taxation if the shareholding is more than 10% and the ownership last at least 24 months. Dividend income is taxable. If a number of conditions are met including a shareholding of at least 10% in an EU company and a holding of at least 24 months, then dividends may not be taxed. 

  1. Social contributions

Social contributions are based on the employee’s remunerations and depend on the social fund where the employee is registered. The rates of social contribution funds are 14.12% for employees and 24.54% for employers. The maximum remuneration on which these contributions are paid is 6,500 EUR per month.

  1. VAT

The standard rate of VAT applicable is 24%. For certain types of goods and services, the rate applicable is 13%.

  1. Withholding Tax

This tax is imposed at the rate of 5% on dividends, 15% on interest, 20% on royalties and 20% on technical, managerial, consulting, and other services. However, there are certain exemptions to it. Further, tax may be withheld on certain other payments of income. Tax rates may be reduced as per double taxation treaties and EU Directives.

  1. Tax on Movable Property or ENFIA

This tax comprises basic and additional taxes calculated at specific rates and is determined on the basis of the area of the property, applying a number of coefficients, location, type of use, etc.

  1. Inheritance and gift tax

Inheritance tax is paid on inherited movable as well as immovable property. Tax is calculated at progressive rates from 1% to 40% depending on the degree of kinship and several other factors. This tax is also paid when receiving gifts including gifts from parents at progressive rates depending upon the value of the object, its type, and the degree of kinship of the parties.

  1. Real Estate transfer tax

Real estate transfers that are not subject to VAT are subject to real estate transfer tax. It is levied at a rate of 3% and an additional 3% is payable to municipalities.

  1. Stamp Duty

Non-residential rentals except shopping centers and logistics centers are subject to stamp duty at a rate of 3.6%. Stamp duty may be levied on loans at the rate of 2.4%. However, there are exceptions, particularly for bank loans and bond issues. It may be levied in a number of other cases as well.

  1. CFC Rules

If the following conditions are met then the undistributed profits of foreign companies are included in the tax base of Greek tax residents:

  1. The taxpayer owns more than 50% of the shares, voting rights or the right to receive more than 50% of the profits of the foreign company either directly or indirectly or individually or jointly with related parties.
  2. IF the income tax paid by the foreign company is less than half of the tax that would be paid in Greece on such income.
  • If more than 30% of the income of a foreign company is represented by passive income (dividend, interest, royalties, etc)

These rules do not apply to companies in the EU or EEA if they have significant economic activity with appropriate personnel and assets which can be proven accordingly.

  1. Capital Appreciation Fee

When a capital increases in value, a fee at the rate of 1% is levied which is known as a Capital Appreciation Fee.

Tax Period and Filing

The tax period or the financial year in Greece is the calendar year i.e., from 1st January to 31st December. However, the taxes are levied in the next financial year which means that the tax year is the one after the year of income. Tax returns must be filed by 2nd March after the end of the tax year.

Frequently Asked Questions

Greece has a progressive tax system. The tax rates start at 9% for those earning €10,000 and go up to 44% for those earning over €40,000.

Yes, there is double taxation in Greece but Greece and the United States have entered into a totalization agreement that helps prevent double taxation of Social Security benefits for individuals who have worked in both countries.

Yes, tax evasion is a crime in Greece.

Non-residents in Greece pay a tax of 9% to 45% of their income. The tax rate applicable depends on the income.

The 7% percent flat tax rate in Greece is a tax program applicable to foreign pensioners who decide to live in Greece. It is not necessary to be a member of the EU citizen. You can just rent or buy a house to take advantage of this program.

Around 60% of the Greeks don’t pay taxes.

The annual tax evasion in Greece exceeds € 60 billion.

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