Taxes in Greece for Expats: The Complete Guide for 2023

Contents

Three Basic Kinds of Taxes in Greece

At first, the Greek tax system seems pretty straightforward. Unlike in some other countries, taxation begins with the first euro you earn. The tax rate in Greece is progressive.

There are three basic kinds of taxation:

• Income taxes are paid by corporations and private individuals.

• Capital or property taxes cover real estate and inheritance of property.

• Consumption taxes include VAT and stamp duty. All taxes on different transactions from transferring house ownership to registering a car or paying a special duty for a cell phone service belong here.

However, it's the details and accompanying bureaucracy that can make Greek taxes for non-residents a nightmare and consulting your country’s embassy will barely help

Read more:

• How to obtain Greek citizenship?
• Property taxes in Greece

Residents and Non-Residents

First, you should know whether you are a tax resident of Greece or not. It changes the way you declare your income and pay taxes. Greek tax residents are people that have lived in the country for at least 183 days. This residency time period includes your arrival and departure dates, and holidays.

If the tax residence applies to you, all your declared worldwide income (including crypto) will be taxed in Greece. Your country of origin can have a tax treaty with the Hellenic Republic. It can exempt you from some taxes or allow you to pay them in your home country, which can be financially beneficial in some cases.

Greece Taxes for Individuals

Requirements state that all your personal income in Greece is subject to taxation. Income tax rates in the country are progressive up to 44%. It means that they increase depending on how much money you've earned.

Your individual income can consist of your salary or payroll, pension, or profits from your business.

• If you earn less than 10K euro, the income tax is 9%.

• If you earn between 10K and 20K euro, the income tax is 22%.

• If you earn between 20K and 30K euro, the income tax is 28%.

• If you earn between 30K and 40K euro, the income tax is 36%.

• Any income above 40K is taxed at a whopping 44%!

Greek tax residents are allowed to file for a personal income tax deduction to get a tax refund. The size of the deduction is influenced by:

• how many family members you have,

• whether your employer meets a quota on buying Greek or EU products and services.

Additionally, 

• mandatory social security payments are deductible,

• donations to recognized charities also provide a tax deduction.

For example, you are single with no dependent family members. If you've made less than 12K euro in a year, you can receive 777 euro back. To calculate your tax deduction, contact tax authorities or hire a professional accountant.

The VAT Tax Rates and The Stamp Tax

The value-added tax is the most common kind of tax that both individuals and companies pay. Together with the stamp tax, it belongs to the indirect systems of taxes.

The VAT tax rate in Greece is the highest in the Eurozone, but not the highest in Europe.

• The standard rate which covers most goods and services is 24%.

• Some tourist businesses, street food and flower vendors, and health services use a reduced rate of 13%.

• Books, newspapers, and theatre tickets are sold with a further reduced VAT rate of 6%.

• The islands of Chios, Leros, Lesvos, Kos, and Samos have had their VAT rate reduced to 17% since 1 July 2021.

• International travel by planes and sea transport is VAT-free.

The stamp tax is 2,4% for most business transactions and money loans. In some cases, like renting out a non-residential property, the stamp duty is set at 3,6%.

Property Taxes in Greece

ENFIA is the real estate/property tax in the fiscal environment of Greece.

It consists of two parts:

• the principal tax that is levied on your property,

• the supplementary tax on the value of your property rights.

• The principal tax is measured by multiplying the property's area squared by the coefficient ranging from 2 to 13 euro per sq. m.

• The supplementary tax is measured by multiplying the property's area by the coefficient ranging from 0.0037 to 11.25 euro per sq. m.

The coefficients depend on your property value and location. The law gives you 250K euro in property value deduction. If you own and maintain a recognized historical building, which is helpful for tourism and culture, you don't have to pay the supplementary tax at all.

The property Inheritance tax is a separate case. It usually depends on your relationship to the person you inherit from and the value of the inheritance. It can range from 1% to 40%. Anything under 150K euro is tax-free for close relatives like spouses and children.

Employment Income and Social Security Payments

If you are self-employed, you have to pay your income tax in advance. You can adjust your tax payments according to your future earnings. You should do so by hiring an accountant.

If you work for a Greek employer, in addition to your taxable income, you will have to make social security (EKA) payments. Since 1 January 2021, you will pay 14,12%, and another 22,54% of your salary is contributed by your employer. These payments will cover your pension and retirement, medical insurance, and possible unemployment benefits in case of some emergency.

Reporting Your Greek Income Tax and Filing Forms

You can pay your taxes and file forms personally if you live in Greece. Non-residents can file their tax returns with the help of a tax representative. Your income taxes can be paid at the nearest tax office. Property tax forms should be filed at the tax office in the town of Greece where your property, such as a flat, is located. E.g., if it’s on Rhodes, the procedure should be completed on this island.

Before you are able to pay any tax, you should get a personal tax identification number (AFM).

The tax year corresponds to the calendar year. You have to file tax forms no later than the end of June of the following year.

Corporate Taxes in Greece

If you plan to start a company in Greece, you should know how your business profits are going to be taxed. The general corporate tax rate is 24%. The Greek government is planning to reduce it to 22% starting. Some businesses like banks, credit institutions, and loan providers are subject to a 29% corporate tax.

Like with individual income, worldwide corporate profits become a tax liability in Greece if the company is a resident. Non-residents pay taxes only on income that comes from doing business in Greece.

Capital gains tax is also 24%. You will pay this tax if the business property or capital assets you own increase in value.

If your business spends money on technological and scientific research — a healthcare corporation can be an example. Royalties, interest, and fees paid to the foreign affiliates of your company can be deducted, too. When it comes to deductible charity donations, Greek tax authorities decide on a case-by-case basis.

You will need an experienced lawyer and accountant to navigate the recent changes in the Greek taxation rules and regulations.

Withholding Tax Rates

If your Greek company pays royalties or dividends to a non-Greek resident, they are subject to a withholding tax. The tax doesn't apply to Greek subsidiaries of companies registered in the EU. Consulting and management fees paid to EU companies are also not taxed.

• The general withholding tax rate is 5%.

• 15% is applied to interest payments.

• Patent and royalty payments are taxed at a 20% rate.

• Fees for technical services, management, and consulting are taxed at a 20% rate.

Controlled Foreign Company (CFC)

If you are a legal resident of Greece and own a controlling stake in a non-Greek company, such a company is classified as a CFC. A controlling stake is defined as owning more than 50% of shares, profits, dividends, equity, or voting rights in that company. It makes your income earned subject to taxation in Greece.

Other factors that force you to pay corporate and other taxes for a CFC in Greece include:

• If the CFC pays less than half in taxes of what it would have paid in Greece.

• If 30% or more of your income from such a company comes from activities that add little or no economic value (dividends, royalties, invoicing, or financial leasing).

However, these rules do not apply if your company or other legal entity is registered in an EU country. It should also be engaged in substantial economic activity. It includes trading, hiring staff, making sales, building and maintaining premises, etc.

Rules of Double Taxation

Greece has double taxation agreements with 57 countries, including the US and Great Britain. You should consult with your home country officials on the specifics of double taxation.

• Progressive income tax;

• Variable property tax if you own real estate there, which will depend on the property's total value;

• The VAT and stamp tax of up to 24% and 2.4%, respectively.

Apart from that, if you own an enterprise in the country, you will have to pay corporate tax, which amounts to 24% of your total revenues.

Job Opportunities for Expats in Greece

To begin with, you will have no chance of finding a job if you cannot speak Greek, unless you choose to relocate to teach English or, perhaps, work in the IT industry. On the other hand, these professions are among the highest paid ones in Greece, and the locals do not seem to need us very much for anything other than English lessons anyway.

If you choose to step out of these two professional fields, however, prepare for a drastic reduction in your monthly income since the average salary in Greece is about €740–770, after taxes. Your income tax will depend on your monthly salary, and the good thing is, you do not have to pay it at all if you earn less than €12K per month. In other words, if you learn Greek and find a job outside the language teaching and IT industries, consider yourself exempt from income tax altogether.

Capital Gains Tax in Greece

Your capital gains taxes from interests and dividends, including the government bonds and other investment operations, will amount to 15% and 5%, respectively. However, keep in mind that any trade dividends or interests earned inside the country are subject to the local income tax, added to withholding tax at the current rate.

You will not have to pay the tax from the stock trading if you do not own more than 0.5% of the share capital of a company in question, and the direct transactions and asset acquisition costs do not form part of your capital gain either. However, in the case of unlisted companies, whether foreign or local, the 15% tax rate will apply nonetheless.

Apart from that, the capital gain from corporate bonds of a company registered in the European Union is not subject to taxation. Moreover, you will be exempt from income tax if a government or corporate bond remains your property until redeemed. And in some cases, they may reduce capital gain tax for a non-resident down to 13% and even 6%, depending on one's nationality.

The table below shows the standard withholding tax rates for different types of capital gains:

Road Tax in Greece for 2023

When buying a car in Greece, expatriates must pay a vehicle acquisition tax. Commonly known as car tax, it is also payable upon importing a vehicle before you can get a local registration number plate.

Besides, in the case of a second-hand car, you will also have to pay classification and luxury taxes, and a brand-new car, even if it’s not too expensive, will be subject to Value Added Tax too. All the taxes are payable within two weeks from the date you purchase the vehicle or import it into the country. (E.g. when it physically crosses the customs.)

Inheritance Tax in Greece

The Greek inheritance tax rate depends on the taxpayer's relationship to the deceased. In the case of close relatives, the inheritance rate is 1%–10% of the tax value, excluding the tax-free amount. Otherwise, the rate may be anything up to 40%, excluding the tax-free amount.

There are three scales for the inheritance tax in Greece, namely:

1. Spouses, parents, children and grandchildren.
2. Grandparents and further up, great-grandchildren and further down, adopted children, step-parents, children from previous marriages, siblings and in-laws.
3. Everybody else not included in the first two categories.

Each scale is further related to a specified scale factor in percentage and a tax scale in euros and correlated with the taxable property value. The system is incredibly complicated, and we strongly recommend, for that reason, to consult a lawyer specializing in inheritance legislation to ensure correct calculations of the due tax.

Greek Tax Brackets

The Greek Tax Department provides progressive rates for income, property and rental income taxes, depending on one's monthly salary, property value and rental price, respectively, as shown in the tables below.

Greek Income Tax

Greek Property Tax

Greek Rental Income Tax

Incentives for Foreign Taxpayers in Greece

In their attempts to overcome the detrimental consequences of the recent financial crisis, including the Brexit consequences, the Greek government has gone out of its way to stimulate the monetary flow from overseas. Numerous tax incentives introduced in the last few years, such as tax reductions and exemptions for pensioners and property owners, all aimed at attracting foreign taxpayers to the country, including American migrants.

For example, expatriates may, in some cases, be exempt from paying income tax altogether and even be entitled to a contribution of 50% of the money earned in the country for seven years and granted an exemption from property and road taxes, as a cherry on top. And if you become a Greek tax resident and invest at least half a million euros in the country's economy, you will pay a fixed €100K annual tax on your foreign income, disregarding the actual income earned, which makes it a viable reason to emigrate.

And if you become a Greek tax resident and invest at least half a million euros in the country's economy, you will pay a fixed €100K annual tax on your foreign income, disregarding the actual income earned.

Tax Returns in Greece

The Greek financial year begins on the 1st of January and ends on the 31st of December, and the taxes are payable for the year ahead. The due date for submitting your tax returns is the 2nd of March, following the assessment year. The exception is if you hold an employment contract, in which case you do not have to do anything since your employer, who provides legal representation in this case, files your tax returns every month.

If you are self-employed or own a company in Greece, you file the advance tax payments once in three months, plus the final returns at the end of the assessment year, making it five instalments per year in total. And the advance tax payment is only 50% of the standard rate if you established your company within the last three years from the date of the tax submission.

As soon as you arrive in Greece, you should apply for a Greek tax number called AFM. You will need it regularly for all sorts of purposes, including the tax return procedure. Upon receiving your AFM number, you must submit the E1 Tax Return Form annually, even if you did not reside in Greece during the assessment year and your return is nil. In addition, in the case of property ownership, you must attach the E9 Property Declaration Form as well.

The data to fill in the forms include, if applicable:

• Pension, rental and inheritance income;

• Corporate and capital gains, both foreign and local;

• Property and vehicle ID numbers;

• Loans;

• Other sources of income unspecified heretofore.

How to Pay Property Tax in Greece

If you own any property, even if it’s a small beachfront house, you’re obliged to pay the ENFIA tax. There are four ways to submit your real estate and other taxes in Greece:

Directly to the cashier in your Greek bank

All you have to bring with you is the 30-digit identification code for your particular tax and your ID.

Via money transfer from another European bank outside Greece

You will only need the 30-digit identification code for your particular tax and the recipient's account details for completing the transaction.

On your Greek municipality's official website

1. If it is your first time, complete the registration procedure on the site.
2. Log into your account.
3. Click on the Property Tax button.
4. Select the appropriate category for your property and the assessment year.
5. Fill in your personal information, like your name and your property's ID number.
6. Enter the property value.
7. Choose your payment method and click on Enter to complete the payment.

On the Paytm mobile app

1. Open the app on your mobile device.
2. Go to Recharge and Pay Bills.
3. Proceed to More Services.
4. Tap on the Municipal Tax button.
5. Select your municipality.
6. Fill in your personal information, such as your property's ID number and the Ward number.
7. Tap on the Get Tax Amount button.
8. Choose your payment method and click on Enter to complete the payment.

Conclusion

The Greek tax system had been criticized in the past. It was the biggest hurdle for many foreigners wishing to move to Greece and getting the expat. However, the state government tries to implement new laws that would lower some taxes and simplify the payment process.

Hiring professional help is advised when dealing with issues of accounting and taxation in Greece.