Taxes in Greece: A Guide for Foreigners

For many foreigners who come to work and live in Greece, taxes in Greece might seem excessive with a top personal income tax rate of 44 percent at a low income threshold of €40.000. However, Greece has a unique tax regime to soften the blow, allowing foreigners to reduce their tax burden significantly.

At the same time, Greece has a much lower corporate tax than many other Western European countries, with a flat corporate income tax rate of 22 percent. Before you decide to buy a home, start a company, or relocate to Greece, you should know a few things about Greek tax treatment.

Who is liable to pay taxes in Greece?

Greek taxes are imposed on both individuals and businesses. Taxes are levied on most forms of income, including income earned from employment, rental income, royalties, and business profits. Greece practices territorial income taxation; therefore, any individual or entity deemed a Greek tax resident is liable to pay income taxes in Greece.

Individuals: All individuals who spend more than 183 days per year in Greek territory are considered Greek tax residents and are liable to pay taxes. Reiterating the point, Greece adheres to a territorial tax framework.

This implies that both Greek citizens and foreign residents exceeding 183 days outside the country could be exempt from specific tax responsibilities. However, they may still be liable for real property tax, inheritance tax, or taxes on other assets held in Greece, as dictated by territorial tax policies.

Legal entities: Greek tax residency for a legal entity is established when it is incorporated or inducted under Greek laws, holds its registered seat in Greece, or has effective management based within the country.

A legal entity meeting these criteria becomes subject to Greek tax laws and regulations, including the obligation to report income derived from both domestic and international operations. The tax liability for a legal entity is charged at a flat rate of 22 percent. Depending on the industry or if they’re registered in a foreign country, there are specific tax deductions and exemptions businesses may be able to access.

An Overview of Greek Taxes

Besides corporate income tax, all taxes on income in Greece are progressive, which means that when you earn more money, your income tax rate rises based on your total income earned. Below are details regarding taxes in Greece for foreigners.

You are subject to paying taxes in Greece if you:

• Have a buy a property in Greece
• Are employed or engaged in professional activity in Greece
• Have spent more than 183 days in Greece in any calendar year
• Have an annual income of more than €3,000 (from salaries, self-employment, pensions, alimony, or agricultural activities)
• Have a business or an investment in Greece
• Acquire an inherited or gifted asset located in Greece

If you are a non-resident of Greece, you must pay taxes only on your Greek income or assets. A Greek income tax calculator can help you determine how much you must pay. If you are married, you will be taxed individually; however, some modifications may exist.

As an employee or self-employed person in Greece, you must pay taxes on your personal income. There is no variation among Greek tax residents. Greek citizens and residents with temporary or permanent residence status hold the same tax liability, depending on their income categories and circumstances.

The tax rules for residents of another EU member state earning 90 percent of their income in Greece allow specific tax deductions and credits.

Besides the taxes mentioned, other taxes within the Greek tax system are levied on those who:

• Own property in Greece
• Ow vehicles such as motorcycles, boats, or planes in Greece
• Purchase or develop property in Greece
• Are a limited business partner in Greece
• Possess a swimming pool in Greece that is larger than 25 m2
• Make a living by renting out commercial or residential property in Greece

Types of Taxes in Greece

Types of Greek taxes include:

• Social Security tax for social security contributions owed by the employee and employer
• Person income tax for employees and self-employed individuals
• Corporate taxes for legal entities
• Corporate income tax
• Withholding tax
• Payroll taxes
• Value Added Tax (VAT) on products and services
• Capital tax on movable and immovable property
• Inheritance tax on inherited property
• Gift tax on donations and gifts
• Capital gains tax on the sale of assets
• Property tax on property ownership

Income Tax in Greece

In Greece, income from employment, professional activities, and investments is subject to taxation.

• Real estate
• Services provided by professionals and other sources
• Mobile values or financial instruments
• Business activities
• Agricultural activities

Employers in Greece are required to deduct the amount of tax and social security contributions due from each employee’s monthly salary. The employer contributes 22.29 percent of the employee’s salary to Social Security, and employees are liable to contribute 13.87 percent of their employment income as a Social Security tax.

If you are self-employed in Greece, you must pay tax on the total income you earn from self-employed activities. This personal tax will be offset on an annual report. You make Social Security contributions out of pocket as a self-employed individual, covering unemployment, pensions, and health care.

Tax Rates in Greece

Personal income tax rates

Despite the affordable cost of living in Greece for many expats, they’re still liable to pay employment income taxes on their worldwide income as tax residents.

Additionally, other forms of income outside employment are imposed at various rates.

All Greek tax residents are eligible for a standard tax reduction.

Corporate income tax rates

Corporate taxes in Greece are simplified, aiming to streamline the tax system for businesses and facilitate ease of compliance. Most legal entities are charged corporation tax at a flat rate of 22 percent.

Legal entities operating in specific industries in Greece are subject to a separate income tax scale. Credit institutions face a tax rate of 29 percent, applicable only for the tax years they were subject to the provisions outlined in Article 27A of the Income Tax Code (ITC) concerning deferred taxation.

Shipping companies, including those with vessels flying the Greek flag and foreign-owned firms with vessels flying a foreign flag but maintaining a ship management company in Greece, are liable to the Greek tonnage tax.

Real estate property tax rates

Rental income tax is imposed at progressive rates in Greece.

Property owners undertaking building renovations to improve energy efficiency, functionality, or aesthetics can qualify for a deduction of 40 percent of the renovation expenses.

Tax on Capital Gains

Capital gains are not taxed individually but consolidated into an individual or company’s total income, except in the following scenarios:

1. Gains on the sale of shares listed on a stock exchange are taxed at a ten percent rate. This tax is a prepayment since the capital gain is subsequently taxed according to the standard regulations. If these gains are distributed later, the entity pays their regular tax and deducts the ten percent on their tax return.
2. Sales of shares not listed on a stock exchange are taxed separately at a rate of five percent of the sale price. If a company earns this revenue, the additional five percent tax is treated as a prepayment, and the gains are taxed like every other taxable income.
3. Profit from the sale of a right related to an entity’s current operation is taxed separately at a 20 percent tax rate. In cases where the seller is a public limited company, the profit is taxed along with other income.
4. Profit from the sale of any kind of company, excluding a public limited company and a business as a whole, is taxed separately at a rate of 20 percent.

To sum it up, individuals, whether residents or non-residents, will be taxed at a fixed rate of 15 percent capital gain tax on real estate property sales. For companies, a capital gain is added to regular income and is taxed at the same rate as ordinary income.

Non-Domicile Tax Regime

Greece implemented a “non-domicile” tax regime for foreign individuals who wish to transfer their tax residency to Greece by paying an annual flat tax on their foreign income, regardless of the total income earned, and with no obligation to declare their foreign earned income in Greece.

Through the non-dom regime, foreign nationals can reduce their taxes if they follow the Greece tax residency rules and relocate their tax residency to Greece. Tax residents are required to pay a flat tax value of €100,000 every tax year on their total income earned outside Greece. The Greek tax authority allows foreign residents to take advantage of this regime for 15 fiscal years.

Successful applicants of the Greece Golden Visa program are eligible for the non-dom tax regime, provided they:

• Have not been a tax resident of Greece for seven of the past eight years before moving their tax residence to Greece
• Have invested at least €500,000 in real estate, business, transferable securities, or shares in Greek companies. If they’re the majority owner of the shares, the investment can be made by a legal entity.

Investment may be made at any time between the implementation of the non-dom tax system for foreign investors and three years following the submission of the application.

There will be no additional tax obligation for income generated overseas after paying this fixed tax value, and you will legally avoid paying inheritance tax or gift tax on properties situated abroad.

Important Dates for Tax Payments and Reporting

Greece’s tax year runs from 1 January to 31 December of the same calendar year. However, taxes are levied in the next fiscal year. The tax year follows the year of income. You have until 2 Marc after the end of the fiscal year to file your tax return. Income taxes through employment are paid from withholding taxes by employers and don’t require submitting a tax return.

The withholding tax is used to submit advance payments once every quarter. If you are self-employed, you must submit tax payments five times a year–at the end of each quarter and the end of the year.

Double Tax Treaties in Greece

Individuals with investments or interests in foreign countries may face what is known as “double taxation.” Double taxation occurs when an individual is liable for tax in two countries, and both impose tax on the same income.

Greece has a double tax treaty with numerous countries, including the United States, to stimulate economic growth and eliminate the risk of double taxation. This treaty represents a mutual agreement between two nations to prevent taxing the same income twice, and they determine which has the right to collect taxes based on residency and economic activities in each country.

Greece has a double income tax treater with the following countries: 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.

In addition to a double income tax treaty, Greece has inheritance, estate, and gift tax agreements with Germany, Italy, Spain, and the United States.

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Frequently Asked Questions about Taxes in Greece

Are taxes high in Greece?

Greece is not among Europe’s low-tax countries, with a maximum income tax rate of 44 percent. However, corporation tax is imposed at a flat rate of 22 – one of the lowest among Western European countries – and foreign nationals can reduce their tax liability through the Greece Non-Dom Tax regime.

Is Greece tax-friendly?

In Greece, all of your income is taxable, including worldwide income. The country’s income tax rates are progressive up to 44 percent, meaning they rise in proportion to your earnings. Individual income might be derived through salary, pension, or company gains. However, some may consider Greece tax-friendly through its non-domicile tax regime, allowing qualifying individuals to pay a fixed tax fee instead of income tax.

Is Greece a tax haven?

Greece is not typically considered a tax haven. While the country offers several incentives and a relatively competitive corporate tax rate, it does not fit the traditional characteristics of a tax haven. Greece has specific tax regulations and adheres to international tax standards. It does not attract individuals or businesses primarily seeking extremely low tax rates, banking secrecy, or lenient financial regulations, which are standard features of recognized tax havens.

How do taxes work in Greece?

Individuals living in Greece for more than 183 days per year are taxed on their worldwide income. Those residing outside Greece for more than 183 are taxed on investments and interests located in Greece. Taxes for investments can include local income taxes, such as property taxes for foreigners and citizens.

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

Non-Greek residents can file their tax returns by selecting a tax representative. The tax representative can then submit them to the Non-Greek Resident Tax Office. It should be noted that the taxpayer must have a Greek source of income and that the tax representative’s tax office must be in Athens.

What is the tax return due date in Greece?

Individual income tax returns must be filed in Greece by 30 June following the tax year of income.

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

The VAT rate is 24 percent, although there are various reductions in the VAT rate for some services in Greece.

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

Typically, yes. However, if you are an individual from a European Union nation and 90 percent of your annual income comes from Greece or your taxable income is relatively low, you may be eligible for specific deductions or tax reliefs.

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

Greece and the United Kingdom have a double taxation treaty. As a result, some gains and generated income may be exempt or subject to lower taxes. Reviewing the agreements between the two countries is essential to understand tax implications for UK investors in Greece.

What is the Greek Solidarity Tax?

Greece introduced a unique solidarity contribution known as the Social Solidarity Income (SSI) to support low-income Greek residents and reduce extreme poverty. However, the solidarity contribution placed a health tax obligation on Greek taxpayers and was rescinded in 2023.