Greece

Tax rates 2012 Greece

Corporate tax

Rate

The corporate tax rate of Greece is 20%. Certain exceptions applies whereas partnerships is 25%, unless the main profits recide to individual general partners, which in then is taxed at the normal corporate tax rate of 20%.

Residents taxed on their worldwide income, whereas nonresidents are taxed on their Greek source profits.

The tax is levied on income derived from companies profit, dividends, fees to directors and profits to employees. Normally expensses are deductable.

Taxation of dividends

Dividends from a Greece resident corporation are effectively taxed at a flat rate of 25%. Non residents may be exempt if there is a EU parent-subsidiary directive in place, or if there is a tax treaty in hand.

Capital gains

Capital gains are taxed at the same rate as corporate tax rate, 20%. Certain scenarios the rate may be lowered/exempt if conditions are met.

Losses

Losses can be carried forward up to 5 years. Carrybacks are not allowed.

Withholding tax

Dividends are tax at a rate of 25%.

The withholding tax for interest paid to a foreign entity without a permanent establishment in Greece will be taxed at a rate of 40%, unless the rate is reduced when there is a tax treaty in hand. The EU interest and royalties directive allows Greece to apply a 5% withholding tax until 30th of June 2013.

Royalties without a permanent establishment in Greece are subject to a withholding tax at a rate of 25%, unless it’s reduced under a tax treaty.

 

Individual tax

General

Individuals living or regularly residing in Greece is considered a resident for tax purpose. Individuals is taxed on their worldwide income. Nonresidents are just taxed on their income from Greek sourced work. Effectively this means that if an individual spends more than 6 months he or she is considered a resident. There is also the possibility to apply for a territorial taxation for an individual residing in Greece, if certain conditions are met, for a period not more than 3 years.

Greece will continue to tax an individual for an indefinite period the worldwide income. Even when his/her transfers its residency to a non cooperative jurisdiction, with similar provisions applying for migrations to countries with more favorable tax regime.

Taxable income

Taxable income for an individual is considered to conclude employement, from business, professional income or investment income. Domestic dividends is taxed at a rate of 25% withholding tax, foreign sourced dividends received by a Greek tax resident are subject to a 25% withholding tax.

Rates

Income bracket        Tax rate    Tax per bracket     Aggregate Tax

Up to 10,500            Exempt      0                                  0

Following 1,500      15%              225                             225

Following 18,000   27%             4,860                         5,085

Following 45,000  37%              16,650                       21,735

Exceeding 75,000 40%

Capital Gains

Depending on type of gain realized, tax tanges from 0% up to 20%. Sale of shares in a public company s taxed at a rate of 10%, sales of shares on non-public companies are taxed at a rate of 5%. If the profits are from a sale of interests in any company except public limited liability company, are taxed at a rate of 20%. Profits from the sale of a right, relative to the operation of an enterprise, this is due for a 20% tax rate.

Deductions

Deducations are in general very limited. Previously Greece was more generous, and granted certain deductions even though there was a foreign tax treaty in hand.

Real Estate

Property tax in Greece is levied on the first of January every year.

First EUR 200,000 tax-free

Up to EUR 4 999,999 tax ranges from 0.2% up to 1%.

Above EUR 5 000 000 a flat rate of 2% is levied.

Net Worth Tax

There exist no net worth tax in Greece.

Inheritance Tax

There is only an estate tax, whereas for close relatives a tax from 1% up to 10% is levied on the taxation value of the property, applied after the first EUR 200 000 which is tax free.

Social Security

Employed individuals contributes to the social security. The individuals employer contributes 16% of the total contribution.

VAT

VAT rate of 23% applies to most supply of goods, provision of services. Specific categories of goods and services will be taxed at a rate of 13% or a lowered rate of 6.5%.

Public service (health, education, legal, insurance etc.) are not subject to VAT.

 

Other

Tax year. Calendar year.

Tax treaties. Greece currently has 50 treaties.

Filing requirements. VAT return is submitted quarterly or on a monthly basis. The submission of VAT return must be accompanied by any payment due. Though if VAT returns are due on or after 1st of Jly 2011, they may have their VAT paid in installments, with 40% of the VAT payable at the time the return is submitted, and the remainder payable in two equal monthly installments with a 2% surcharge(each installments must be of a minimum of EUR 300).

Registration (for VAT purpose). Registration for VAT there is a threshold of EUR 10,000 for supplies of goods, EUR 5,000 for supplies of services and EUR 10,000 for mixed supplies where only EUR 5,000 is derived from provision of the services. These levels do not apply to companies or freelancers.

Nonresidents that make taxable supplies of goods or services in Greece is also required for registration of VAT, the threshold is EUR 35,000.

 

Links

Tax authorities. Ministry of Finance

Consulate

Local Tax Resources

Chamber of commerce

(Online realtor/stock exchange)