Taxation in Greece

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Taxation in Greece, as in most developed nations, is based on the direct and indirect systems.

Income tax[edit]

Income taxation in Greece is progressive. An individual in Greece is liable for tax on their income as an employee and on income as a self-employed person. In the case of an individual who is a permanent resident of Greece, their tax owed is calculated on their income earned in Greece and overseas. An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the tax authority every month.[1][2]

The 2014 tax rates are as follows:[3]

Income Taxation
€0 – €25,000 22%
€25,001 – €42,000 32%
> €42,001 42%

In May 9, 2016 a new set of emergency measures were voted in the Parliament by the SYRIZA/ANEL government.[4] These changes include new income tax rates as well as new solidarity tax rates. The tax rates applicable to income earned in 2016 are as follows:[5]

Income Taxation
€0 – €20,000 22%
€20,001 – €30,000 29%
€30,001 – €40,000 37%
> €40,001 45%

Social security tax[edit]

Employees[edit]

An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security as in many other EU member states. The employer's contribution amounts to 24.56% of the salary. The employee's contribution is 15.5%.

Self-employed or contractors[edit]

The basic social security contributions amount to the 27.1% of total income (after VAT paid, qualified expenses deducted and before income tax paid).
This number can broken down to 20.0% for public pension funding and 7.1% for the public health system.

An extra 7.0% is charged for people enlisted to added benefits public pension schemes.
An extra 4.0% is charged for people enlisted to retirement bonuses public schemes.
Thus the total contributions can go as high as 38.1% of income.

Income range for calculation of Social security tax is 4,923 - 70,330 EUR per year.
If annual income is out of the range above, the lower/higher limits respectively will be considered for calculation.

Especially for agriculture professionals, the basic contribution of 27.1% will be lower until 2021, as follows:
21.1% in 2017
23.1% in 2018
25.1% in 2019
26.1% in 2020
26.6% in 2021
27.1% in 2022+

Especially for doctors, pharmacists, engineers, lawyers and economists, the total contribution of 27.1-38.1% will be 5-50% lower until 31/12/2020, as follows:
For total income 0-7,000 EUR 0% lower
For total income 7,000-13,000 EUR 50% lower
For total income 13,000-14,000 EUR 49% lower
For total income 14,000-15,000 EUR 48% lower
...
For total income 56,000-57,000 EUR 6% lower
For total income 57,000-58,000 EUR 5% lower
For total income 58,000+ 0% lower

Corporation tax[edit]

Corporations in Greece are taxed on their income in Greece and from overseas. Foreign companies in Greece are taxed only on income that is generated in Greece.

Corporate tax rates by year:

2007, 2008 and 2009 - 25%
2010 - 24%
2011 and 2012 - 20%
2013 and 2014 - 26%
and 2015 - 29%

Capital gains tax[edit]

A capital gain in Greece is added to regular income and is taxable at the same rate as regular income for a company, other than in specific instances as defined in law.

Withholding tax[edit]

As of 1 Jan 2009, Greece imposes a withholding tax of 10% on corporate dividends, unless the dividend qualifies for application of the EC Parent-Subsidiary Directive or if a lower rate applies under an applicable double tax treaty.[6] It also imposes a withholding tax on interest and royalties, however the tax rates may be reduced or eliminated by an applicable double tax treaty or if the payment qualifies for application of the EC Interest and Royalties Directive.[7][8]

VAT[edit]

The VAT tax in Greece is 6.0% to 24%. For all goods not belonging to any special category, the VAT is 24%. For Category 1 goods the VAT is 13%, and for Category 2 goods it is 6.0%. Some items are exempt from VAT, such as medical services and education.[9] On some islands there is a VAT reduction for Category 1 goods to 17%.

Tax exemptions[edit]

There are several cases of Tax exemptions under the Greek taxation system, these are as follows:

  • Proceeds from the sale of shares that are traded on the Athens Stock Exchange.
  • Income from ships and shipping.
  • A dividend received from a Greek company.
  • Capital gain from sale of a business between family members, as defined by law.

Tax deductions[edit]

The examples of Tax deductibility in Greece are, as with most other features of Greek taxation, similar to that of other Western European and North American nations, that is, tax deductibility for things such as charity and other things as shown below:

  • 15% credit on a mortgage for the first residential apartment.
  • 15% rent paid on the main residential apartment up to maximum.
  • Donations to public, religious and other institutions.
  • Compulsory payments to social security.

Business deductions[edit]

Payments[edit]

Social security tax is paid 12 times a year
VAT tax is paid 3 times a year
Income tax is once a year

See also[edit]

References[edit]

  1. ^ "Income tax". Your Europe - Citizens. Retrieved 12 April 2018. 
  2. ^ "Greek tax system - Santandertrade.com". en.santandertrade.com. Retrieved 12 April 2018. 
  3. ^ "Insights - KPMG - GLOBAL". KPMG. 28 March 2018. Retrieved 12 April 2018. 
  4. ^ "Subscribe to read". Financial Times. Retrieved 12 April 2018. 
  5. ^ Naftemporiki (19 April 2016). "Οι νέες κλίμακες φορολογίας εισοδήματος –Τι περιλαμβάνει το νομοσχέδιο". naftemporiki.gr. Retrieved 12 April 2018. 
  6. ^ Llorca, Salvador Trinxet. "Parent Subsidiary. Text and Cases". Retrieved 12 April 2018 – via Google Books. 
  7. ^ http://www.pwc.com/en_CY/cy/publications/assets/pwc-cy_taxup_jan09.pdf
  8. ^ Llorca, Salvador Trinxet (12 April 2018). "European Union Direct Taxes". Asset Protection Publishing. Retrieved 12 April 2018 – via Google Books. 
  9. ^ http://epp.eurostat.ec.europa.eu/portal/page/portal/hicp/documents_meth/HICP-CT/HICP-CT_VAT.pdf[permanent dead link]