In recent years, taxpayers have faced an increasingly challenging regulatory environment. Complying with tax laws and regulations plays an instrumental role in the global tax agenda.
Moreover, staying up to date on tax developments at the local and national level, while meeting the demands needed for more transparency at a multinational level is a key element to avoiding adverse tax consequences. Greece has specific tax rules and adheres to international tax standards.
1. Individuals
Every taxpayer 18 years of age and older is obliged to file an income tax return electronically. Greek tax residents are subject to Greek income tax and required to report on their worldwide income. Non-Greek tax residents are required to file an annual income tax return for their Greek source income with the Greek tax office applicable for foreign residents. For that purpose, the appointment of a Greek tax resident against the Greek tax authorities as tax representative, is required.
The country’s income tax rates for individuals are progressive, ranges between 9% and 44% for income more than 40.000 euro.
2. Corporate Income Tax
Corporate income tax is levied at the rate of 22%. Capital gains are included in the general tax base unless the participation exemption is applicable. Profits from the sale of shares in EU companies is exempt from taxation if the shareholding is more than 10% and the ownership last at least 24 months.
3. Tax Residency
For Individuals : An individual is considered Greek tax resident if she/he maintains permanent or main residence or usual adobe or center of vital interests in Greece or she/he is a consular or diplomatic or public servant of Greek nationality and serves abroad. Furthermore, an individual that is constantly present in Greece for a period exceeding 183 days, including short periods of living abroad, is considered as tax resident in Greece from his first day of presence in Greece.
For legal entities : A legal entity is considered to be Greek tax resident when it is established pursuant to the Greek legislation or that legal entity has its statutory seat in Greece or when its place of effective management is in Greece.
4. Vat
The standard rate of VAT applicable is 24%. For certain types of goods and services, the applicable reduced rate is 13% of the taxable basis. For instance, 13% apply on hospitality, hotel accommodation, certain foodstuffs, passenger transport, entrance to cinema and sports events, dance schools, zoos, import of art objects, gyms, health supplies etc.
5. Alternative minimum taxation based on imputed income
A taxpayer, subject to personal income tax is also subject to alternative minimum taxation when their presumptive income is higher than their total income. The presumptive income is calculated based on the objective living cost and the assets acquisition cost of the taxpayer and their dependent members (articles 30-34 of the ITC).
6. Withholding Tax
This tax is imposed at the rate of 5% on dividends, 15% on interest, 20% on royalties both for residents and non-residents. However, there are certain exceptions to it. Further, tax may be withheld on certain other payments of income. Tax rates may be reduced upon application of the double taxation treaties and EU Directives.
7. Tax on Immovable Property or ENFIA
This tax comprises basic and additional taxes calculated at specific rates and is determined based on the area of the property, applying a number of coefficients, location, type of use, etc. while there is a tax for immovable property (rental income) which ranges between 15% and 45%.
We can help from tax filing to tax planning following both local and international rules. We, at Privel Partners can help you optimize your business structure. We conduct audits and reviews of financial records to ensure accuracy and compliance with tax laws. We can advise on complex tax issues by taking into consideration latest changes in tax laws and potential tax implications of financial decisions. We can support you with managing risk and avoiding VAT penalties by advising on specific business transactions, reviewing VAT processes and correcting what does not work.
Feel free to address your requests at tax@privelpartners.gr
