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Greece

General Information

Country Name: Hellenic Republic
Currency: Euro (€) (EUR)
Primary Tax Authority: Independent Authority for Public Revenue (IAPR)
Key Legislation:

  • Income Tax Code (Law 4172/2013)
  • Value Added Tax Code (Law 2859/2000)
  • Tax Procedure Code (Law 4174/2013)

Fiscal Authority Allocation

Centralized Fiscal System:
Greece operates a centralized tax system. The Independent Authority for Public Revenue (IAPR) is responsible for administering and collecting taxes, including income tax, VAT, and other national taxes. Local governments collect property taxes and minor fees, but there are no regional income taxes.

Corporate Income Tax (CIT)

Standard Rate: 22%
Corporate income tax in Greece is levied at a flat rate of 22%. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on income sourced from Greece.

Corporate Forms and Taxation:

  1. Limited Liability Company (Eteria Periorismenis Efthinis – EPE): The most common corporate form, subject to the 22% CIT rate.
  2. Public Limited Company (Anonymi Eteria – AE): Typically used for larger businesses, also taxed at the standard CIT rate.
  3. Branches of Foreign Companies: Taxed on Greece-sourced income at the same 22% rate.

Exemptions and Incentives:

  • Research and Development (R&D) Incentives: Greece offers a 100% tax deduction on qualifying R&D expenses.
  • Tax Holidays for Strategic Investments: Certain strategic sectors, such as tourism, energy, and infrastructure, may qualify for CIT reductions or tax holidays.
  • Special Economic Zones (SEZs): Businesses in SEZs can benefit from favorable tax treatment and reduced CIT rates.

Goods and Services Tax (GST) / Value-Added Tax (VAT)

Standard Rate: 24%
Greece applies a VAT rate of 24% to most goods and services. Reduced rates of 13% and 6% apply to essential goods, such as food, medicine, and electricity.

Exemptions:
Healthcare, education, and financial services are VAT-exempt. Exports are zero-rated, allowing businesses to reclaim VAT on input costs.

Personal Income Tax (PIT)

Progressive Rates:
Greece applies a progressive personal income tax system with the following rates:

  • Income up to €10,000: 9%
  • Income between €10,001 and €20,000: 22%
  • Income between €20,001 and €30,000: 28%
  • Income between €30,001 and €40,000: 36%
  • Income above €40,000: 44%

Dividends:
Dividends are taxed at a flat rate of 5%.

Additional Mandatory Contributions

Social Security Contributions:
Both employers and employees are required to contribute to the social security system, covering pensions, healthcare, and unemployment benefits.

  • Employer Contribution: 22.29% of gross salary.
  • Employee Contribution: 15.33% of gross salary.

Self-Employed Contribution: Self-employed individuals contribute around 26.95% of their taxable income to the social security system.

Withholding Taxes

  • Dividends: 5%
  • Interest: 15%
  • Royalties: 20%
    These rates may be reduced under Greece’s double taxation agreements (DTAs).

Transfer Pricing Rules

Greece adheres to the OECD transfer pricing guidelines. Related-party transactions must be conducted at arm’s length, and detailed transfer pricing documentation is required for certain cross-border transactions.

Special Tax Regimes

  • Shipping Sector: Greece offers special tax regimes for the shipping sector, including tonnage tax and exemptions from certain direct taxes on shipping income.
  • Tourism Incentives: The tourism sector benefits from tax incentives, such as reduced VAT rates and tax holidays for infrastructure projects.
  • Digital Nomad Visa: Foreign individuals working remotely from Greece can benefit from tax incentives, including PIT exemptions for the first few years.

Other Taxes

  • Real Estate Tax (ENFIA): Real estate tax is levied annually on property ownership. Rates range from 0.1% to 1.15% of the property’s value, depending on its location and use.
  • Capital Gains Tax: A 15% capital gains tax is applied to gains from the sale of real estate and shares.
  • Excise Duties: Greece levies excise duties on products such as fuel, alcohol, and tobacco.

Double Taxation Agreements (DTAs)

Greece has signed over 57 double taxation agreements with various countries, including major European partners, the United States, and China. These treaties reduce withholding taxes on dividends, interest, and royalties and prevent double taxation.

Local Taxes

Municipalities in Greece collect property taxes and minor fees. However, income tax collection is centralized, with no regional or municipal income taxes. Local governments receive a portion of national tax revenues to fund public services.

Compliance and Reporting

Annual Filing:
Corporate tax returns must be filed by June 30th of the following year. Personal income tax returns must be filed by the same deadline. The tax year coincides with the calendar year.

Penalties for Late Filing:
Penalties for late filing or underpayment of taxes include fines and interest charges, typically set at 0.73% per month on the unpaid tax amount.

Recent Developments

Digital Taxation:
Greece is exploring the introduction of a digital services tax on multinational technology companies providing services to Greek consumers, in line with EU directives on digital taxation.

Green Tax Incentives:
The Greek government has introduced tax incentives to promote renewable energy, energy-efficient buildings, and electric vehicles. This includes accelerated depreciation for green investments and reduced real estate taxes for energy-efficient properties.

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