Updated: 6 December 2024, 07:35 am
|||Taxes in Greece
Greece, like all countries, has its own tax system for individuals and corporations, which has unique characteristics. Income taxes in Greece are progressive, meaning the more you earn, the higher your tax rate. Both employees and self-employed individuals pay taxes on their personal income. Permanent residents are taxed on their global income, whether earned in Greece or abroad.
Non-residents in Greece are taxed only on income generated within the country. Married couples are taxed individually but may qualify for certain deductions or adjustments. Additionally, residents of an EU member state who earn at least 90% of their income in Greece may be eligible for specific deductions and credits.
Who Must Pay Taxes in Greece?
The following individuals or entities are required to pay taxes in Greece:
- Have permanent residence in Greece
- Spend more than 183 days in Greece within a calendar year
- Be employed or self-employed in Greece
- Own a business or investment in Greece
- Earn an annual income above €3,000
- Own a car, motorcycle, boat, or aircraft in Greece
- Own property in Greece
- Be a partner in a limited company in Greece
- Buy or construct property in Greece
- Earn rental income from property or land in Greece
- Own a swimming pool larger than 25m² in Greece
Types of Taxes in Greece
There are mainly 5 types of taxes in Greece:
- Income Taxes
- Value-Added Tax (VAT)
- Social Security Tax
- Property Taxes
- Capital Gains Tax
Income Taxes in Greece
Both individuals and corporations in Greece are subject to income taxes, with rates determined by a well-defined scale.
Individual Income Tax in Greece
In Greece, income tax is deducted monthly from an employee’s salary. Taxable income includes earnings from employment, professional activities, and investments.
Individual Income Tax Rates
| Taxable Income (Euro) | Tax Rate |
| Up to €10,000 | 9% |
| €10,000 – €20,000 | 22% |
| €20,000 – €30,000 | 28% |
| €30,000 – €40,000 | 36% |
| Over €40,000 | 44% |
Corporate Income Tax in Greece
Resident corporations in Greece are taxed on their worldwide income, while non-resident corporations are taxed only on income generated within Greece.
Corporate Income Tax Rates in Greece
Starting from the fiscal year 2021, the standard corporate income tax rate in Greece is 22%. However, credit institutions are subject to a higher tax rate of 29% if their income is subject to the specific provisions of Article 27A of the Income Tax Code (ITC).
Value-Added Tax (VAT) in Greece
Value-added tax (VAT) is applied to most goods and services in Greece. The standard VAT rate is 24%. However, this rate is reduced by 30% in five specific islands and for certain goods or services. Small enterprises that generate less than €10,000 per year in revenue from the supply of goods and services may qualify for VAT exemption.
Value-Added Tax Rates in Greece
| VAT Category | VAT Rate |
| Standard VAT Rate (except for the 5 islands) | 24% |
| VAT Rate in the Islands of Leros, Lesbos, Kos, Samos, Chios | 17% for most goods and services 24% for tobacco products and means of transport |
| Reduced VAT Rate (13%) | For some staple goods (bread, milk, meat, fish), stays at tourist accommodation establishments, domestic care services, and operations of F&B enterprises |
| Super Reduced VAT Rate (6%) | (6%) For certain medicines, vaccines, books, newspapers, magazines, electric energy, natural gas, white walking sticks, Braille typewriters, and tickets to theaters, cinemas, concerts, zoos, and sports events |
| Exempt from VAT (0%) | Certain health, education, cultural, social welfare, financial services, and insurance services |
Social Security Tax in Greece
Social Security tax in Greece is deducted directly from an employee’s salary by the employer. Self-employed individuals are required to make advance payments on their income tax and pay social security contributions from their personal income. The national insurance system covers unemployment, pension, and healthcare insurance.
Social Security Tax Rates in Greece
For social security, the employer contributes 25.06% of the salary and the employee 16%.
Property Taxes in Greece
When purchasing property in Greece, buyers are required to pay taxes based on a percentage of the property value. Additionally, an annual uniform tax is levied on the ownership of real estate, along with a municipal tax. The uniform tax is determined by various factors such as the property’s value, size, location, surface area, and its intended use.
Property Tax Rates in Greece
- Transfer Tax: When buying real estate, a transfer tax of 3.09% of the property value is applied.
- Municipal Tax: This tax is calculated at a rate of 0.025%–0.035% of the property’s value, depending on factors like the property’s location and age. The municipal tax is typically included in the utility bills.
Capital Gains Tax in Greece
Capital gains tax is applied on the sale of an asset and is due only after the asset is sold. This tax applies to capital assets such as stocks, bonds, digital assets, jewelry, coin collections, and real estate. Long-term capital gains (from assets held for more than one year) are taxed differently from short-term capital gains, which are taxed at the regular income tax rate.
Capital Gains Tax Rates in Greece
- Real Estate Capital Gains: Individuals who make capital gains from selling real estate property are subject to a flat tax rate of 15%.
- Corporate Capital Gains: For companies, capital gains are treated as regular income and taxed at the same rate as ordinary income.
Preferential Tax Regime in Greece
Foreigners can benefit from reduced income taxes if they become tax residents of Greece and choose one of the below three special tax regimes.
The first regime is for foreigners employed in Greece: Individuals who reside in Greece and work in Greek companies; those who are self-employed or have a business in Greece can apply to this regime. They enjoy the perk of paying tax on only 50% of their income earned in Greece for seven years.
Eligibility criteria:
- Not being a Greek tax resident for 5 out of 6 previous years.
- Transferring tax residence from a country that has signed an agreement with Greece on tax matters.
- Employed in a Greek company or having a business in Greece.
- Declaring intentions to stay in Greece for a minimum of two years.
The second regime is for foreign pensioners: Retirees who have recently become Greek tax residents are taxed a flat rate of 7% on their foreign income, paid in a lump sum for a maximum period of 15 years.
Eligibility criteria:
- A retiree who has not been a Greek tax resident for 5 out of 6 previous years.
- Transferring tax residence from a country that has signed an agreement with Greece on tax matters.
- Reporting both their Greek and foreign source income in tax returns.
The third regime is for high-net-worth individuals: High-net-worth individuals (HNWI) who have recently become Greek tax residents pay a lump tax of €100,000 per year on foreign source income, regardless of its amount. Under this regime which applies for 15 years, HNWIs are exempt from inheritance and gift tax on foreign assets.
Eligibility criteria:
- Not being a Greek tax resident for 5 out of 6 previous years.
- Investing €500,000 in real estate, moveable assets, or shares of legal entities in Greece or as part of the Greece Golden Visa program.
Conclusion
The above blog has detailed the tax system that Greece applies to its citizens, residents, and corporations. By thoroughly understanding its tax regime, moving to Greece becomes less cumbersome, and you will be able to make informed decisions. For individuals seeking residency options with significant investment opportunities, the Greece Golden Visa program offers a pathway to becoming a resident, along with numerous tax benefits and other advantages.
Frequently Asked Questions
1. How can non-residents of Greece file their tax returns?
Non-residents of Greece file their tax returns through a tax representative they appoint who can file them on their behalf at a Non-Greek Resident Tax Office.
2. What is the tax return due date in Greece?
Individual income tax returns must be filed by the 30th of June after the Greek tax year.
3. When is the tax year in Greece?
The tax year in Greece starts on January 1st and ends on December 31st, and annual income tax must be filed the next year before June 30th.
4. What is the rate of Value Added Tax (VAT) in Greece?
The VAT rate in Greece is 24%; however, certain goods and services benefit from reductions.
5. What is the personal income tax rate in Greece?
In Greece, individuals pay income tax progressively based on brackets and rates range between 9% and 44%.
6. Do investors from the European Union have to pay taxes in Greece?
In general, they do. However, European Union individuals whose income is 90% Greece-sourced, or have very low taxable income, benefit from some deductions/tax reliefs.
