Taxes In Greece: A Guide For Foreginers

Introduction

In Greece, all taxes on income earned are progressive. This means that when you earn a higher income, the income tax rate will increase.

You are subject to pay taxes in Greece as an employee or as a self-employed individual on your individual income. If you bear the status of “permanent resident”,then the taxes will depend on where they are sourced: Greece or the rest of the world.

If you are a non-resident in Greece, you are subject to pay taxes only on your individual income in Greece. And if you are married, you will be taxed separately, although there may be some possible adjustments. 

If you are a resident of an EU member state and if 90% of all your personal income is Greece-sourced, then you can benefit from various deductions and credits.

You must pay taxes in Greece if you:

  • Have a permanent residence in Greece, or
  • Have spent more than 183 days in Greece during any calendar year, or
  • Are employed or carrying out a professional activity in Greece, or
  • Have a business or investment in Greece, or
  • Receive an annual income of more than €3000 (from salaries, self-employment, pensions, alimony, or agricultural activities.) 

Other than the conditions  above, you have to pay taxes in Greece in the following conditions:

  • If you own a car, a motorcycle, a boat, or an aircraft in Greece,
  • If you own a property in Greece,
  • If you are a partner in a limited company in Greece,
  • If you are buying or constructing a building in Greece,
  • If you earn an income by renting a property/land in Greece,
  • If you own a swimming pool bigger than 25 m2 in Greece.

If you are a foreign resident or a non-resident, you are only subject to pay taxes on your income in Greece, thanks to most Double Taxation Treaties. You may find additional information on this below. 

Types of Taxes in Greece

  • Income tax.
  • Social security tax.
  • Capital tax (taxes on inheritance, lottery gains, and on the transfer of real property).
  • VAT (Value Added Tax) on the prices of services and products in the country.

Income Tax in Greece

Employers in Greece must deduct the amount of tax and national insurance due from their employees monthly.

For social security, the contribution of the employer is 25.06% of the salary. The contribution of the employee for social security is 16%.

On the other hand, if you are self-employed in Greece, you have to make advanced payments on your personal income tax, which will be offset on an annual report. And, as self-employed, you will pay your social security personally, from your personal income. The insurance includes unemployment, pension, and health care insurance. 

The types of income which are taxable in Greece include:

  • Employment income
  • Professional income, and
  • Investment income.

The sources of income in Greece are as follows:

  • Real property.
  • Financial instruments/mobile values.
  • Business activities.
  • Agricultural activities.
  • Salaried services.
  • Services of liberal professionals and any other sources.

Tax Rates In Greece

You can find the tax rates in Greece as of 2020 in the tables below:

 

INCOME TAX ON EMPLOYMENT AND PENSIONS INCOME (2020)
TAXABLE INCOME (EURO)Tax Rate
Up to €10,0009%
€10,000 – €20,00022% on band over €20,000
€20,000 – €30,00028% on band over €30,000
€30,000 – €40,00036% on band over €30,000
Over €40,00044% on all income over €40,000

 

INCOME TAX ON BUSINESS AND PROFESSIONAL INCOME (2020)
TAXABLE INCOME (EURO)Tax Rate
Up to €10,0009%
€10,000 – €20,00022% on band over €20,000
€20,000 – €30,00028% on band over €30,000
€30,000 – €40,00036% on band over €30,000
Over €40,00044% on all income over €40,000

 

INCOME TAX ON REAL ESTATE (2017-2020)
TAXABLE INCOME (EURO)Tax Rate
Up to €12,00015%
€12,000 – €35,00035% on band over €12,000
Over €35,00045% on all income over €35,000

 

INCOME FROM CAPITAL (DIVIDENDS, INTEREST, ROYALTIES, REAL ESTATE)
Capital incomeTax Rate
Dividends10%
Interest15%
Royalties20%

 

Rental Income


Rental income in Greece is taxed at a progressive rate. It ranges from 11% to 33%.

INCOME TAX ON REAL ESTATE 2017 – 2020
TAXABLE INCOME, €Tax Rate
Up to €12,00015%
€12,000 – €35,00035% on band over €12,000
Over €35,00045% on all income over €35,000

 

Capital Gains Tax

For individuals, if the capital gain is from a sold real estate property, the tax will be at a flat rate of 15%. For companies, a capital gain adds to regular income and is taxable at the same rate as a regular income. 

Important Dates for Reporting and Payment

The financial year in Greece is between January 1st and December 31st of the same calendar year. Taxes, however, are imposed on the next financial year.

So, the tax year is the one after the year of income. You must file your tax returns until March 2nd after the end of the tax year. If you are an individual who receives income only from a wage, then you don’t have to file an annual return. Instead, your employer deducts the tax from you. Then, the employer sends it to the tax authority every month.

Companies must also make advance payments every three months. If you are self-employed, on the other hand, you must file taxes 5 times a year, at the end of each quarter and the end of the year. 

Double Taxation Treaty in Greece

If an individual invests in a foreign country, an issue called “double taxation” may arise. Double taxation occurs when both source and residence countries impose a tax on the same income of an individual.

To prevent this, there is an agreement called the Double Taxation Treaty. This treaty/agreement is a bilateral agreement that any two countries can make with each other. They aim to prevent double taxation imposing on the same income. With this agreement, the countries decide on which country will tax the income.

How does Greece approach this agreement?

When more than two states want to impose taxes on an income, the state of residence must eliminate double taxation. The exemption method and credit method are available to make it possible. 

Exemption method

An income taxable in the state of source is exempt from taxation in the state of residence. 

Credit method

An income taxable in the state of source is subject to tax in the state of residence. However, the imposed tax in the state of source is credited against the tax imposed by the state of residence on this income. 

With the Double Taxation Prevention Treaty, exemptions and reduced taxes are possible on some of the receipts such as interest, royalties, dividends, capital gains, and others.

If a particular income is taxable under Greek Income Tax Ordinance, yet there is an exemption or reduced tax under a Taxation Treaty, the income will be taxed according to the Taxation Treaty.

Greece has signed Double Taxation Treaties with many countries throughout the world. It has treatments (DTTs) with 57 countries on income and capital. These countries are namely Albania, Armenia, Austria, Azerbaijan, Belgium, Bosnia-Herzegovina, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Hungary, Iceland, India, Ireland, Israel, Italy, Korea, Kuwait, Latvia, Lithuania, Luxembourg, Morocco, Mexico, Malta, Moldavia, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, San Marino, Serbia, Slovakia, Slovenia, South Africa, Sweden, Spain, Switzerland, Turkey, Tunisia, Ukraine, United Arab Emirates, United Kingdom, United States, and Uzbekistan. 

Additionally, Greece has agreements on estates and inheritances, and on gifts with the following countries: Germany, Italy, Spain, and the United States. 

Taxes In Greece: A Guide For Foreginers

Frequently Asked Questions About Taxes in Greece

How can non-residents of Greece file their tax returns?

Non-residents of Greece can file their tax returns via appointing a tax representative. Then the tax representative can file them with the Non-Greek Resident Tax Office. It is important to note that the taxpayer must earn a Greek source income, and the tax representative’s tax office must be in Athens.

What is the tax return due date in Greece?

You must file your individual income tax returns by 30 June after the year of income in Greece.

When is the tax year in Greece?

The tax year in Greece is between January 1st and December 31st. Keep in mind that January 1st of each year is not the cut-off, you don’t have to report tax returns on your annual income until the next year before June 30th.

What is the rate of Value Added Tax (VAT) in Greece?

The rate of VAT is 24%, but there are some reductions in the VAT rate for some services in Greece.

What is the corporate tax rate in Greece?

The amount of corporate tax in Greece is

  •  27% for 2020
    26% for 2021
    25% for 2022 and onwards…

What is the personal income tax rate in Greece?

In Greece, the individual income tax rate is progressive and ranges between 9% and 44%.

Do investors from the European Union have to pay taxes in Greece?

Usually yes, but keep in mind that if you are an individual from a European Union country, and if 90% of your income is Greece sourced, or if your taxable income is very low, then some deductions/tax reliefs may be available for you.

Do investors from the United Kingdom have to pay taxes in Greece?

Greece has a Double Taxation Treaty (DTT) with the United Kingdom. So, there may either be an exemption or reduced taxes on some gains and incomes. It is advisable to check the details of the specific agreement that the two countries made.

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