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Tax

i Greek tax residence

Individuals who are tax residents of Greece are subject to Greek income tax on their worldwide income (Greek and foreign income) while a foreign tax credit is provided on foreign income declared in accordance with the Organisation for Economic Co-operation and Development (OECD) guidelines for the avoidance of double taxation. Non-Greek tax residents are subject to Greek income tax only for their income sourced in Greece. The ITC provides an indicative list of income considered as arising in Greece (Greek-sourced income).

For income tax purposes, an individual is considered as a Greek tax resident provided that he or she maintains in Greece his or her permanent or primary residence or habitual abode or the centre of his or her vital interests (i.e., personal, economic and social bonds) or he or she is a consular or diplomatic employee or public officer of similar status or a civil servant of Greek nationality and serving abroad.

Also, an individual residing in Greece continuously for a period of more than 183 days is considered as a Greek tax resident. This is not applicable where an individual is residing in Greece exclusively for tourism, medical, therapeutic or similar private purposes, if his or her residence does not exceed a period of 365 days, including short-term stays abroad. The above provision may not be applicable if a double taxation treaty (DTT) (ratified by law) exists, in which case DTT provides a different way of taxation from the tax residence of the other country – party of the DTT. It is mentioned that DTT, by its integration into Greek (domestic) law, has automatically acquired an increased legislative power over the domestic legislation, according to Article 28 of the Greek Constitution.

Greece has entered into DTTs with the following countries, providing beneficial income tax provisions compared to internal income tax legislation: Albania, Armenia, Austria, Azerbaijan, Belgium, Bosnia-Herzegovina, Bulgaria, Canada, China, Croatia, Cyprus, the Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Hungary, Iceland, India, Ireland, Israel, Italy, Korea, Kuwait, Latvia, Lithuania, Luxembourg, Malta, Mexico, Moldova, Morocco, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Switzerland, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States and Uzbekistan.

ii Income tax

The following four categories of income are subject to income tax under the current ITC:

  1. income derived from employment and pension;
  2. income derived from business activities;
  3. capital income; and
  4. capital gains income.

Different tax rates apply to the above categories for individuals. The applicable tax rates are either progressive or tax exhaustive (one-off tax). The above-mentioned types of income are taxed as follows.

Income derived from employment or pensions

Income derived from employment or pensions is considered to be the gross income from salaried work and pensions, and includes all types of income, in cash or kind acquired, in the context of any current, past or future employment relationship. In addition, the ITC explicitly provides that the board of directors' fees are categorised as employment income for tax purposes.

Apart from the general provision for the taxation of salaries, the ITC contains provisions for the taxation of specific benefits in kind annually exceeding €300 that are considered as taxable income derived from employment for the employee and are added to the gross income from salaried work and pensions. Benefits in kind indicatively include the following:

  1. the value of goods represented by gift cheques;
  2. the value of vouchers given free of charge to purchase goods or services at associated stores. In the case of food vouchers, the benefit in kind is assumed to be any amount exceeding €6 per working day;
  3. use of company credit cards to cover expenses not incurred on behalf of the company, but to cover personal, family or other expenses unrelated to the business interests of the employer or not used in normal commercial transactions, where the cost is assumed by the employer;
  4. the benefit accruing to employees, managers, administrators, board members and pensions or companies providing energy, telephony, water supplies, gas or subscriber services (such as television) from providing them with a certain quantity of electricity, phone calls, water, natural gas and subscriber channels, at either a reduced rate or free of charge;
  5. various payments made directly by employers to third parties, such as payments to extra tuition centres, schools, nurseries and campsites and payments covering tuition costs and nursery fees, direct payments to cover the cost of such persons participating in workshops, programmes, training or education training courses, or to cover subscriptions to journals or chambers, unrelated to their business activities or the post they hold; and
  6. the provision of company mobile phone connections to employees, managers and board members to the extent that it goes beyond the cost of their tariff plan, provided that the excess above the tariff plan is used for personal reasons and not for reasons associated with the employer's business activities.

Since 1 January 2020, income from employment or pensions is taxed according to the following progressive tax scale.

Taxable incomeTax rate
Up to €10,0009%
€10,001 to €20,00022%
€20,001 to €30,00028%
€30,001 to €40,00036%
€40,001 and above44%
Income derived from business activities

Individuals are subject to income tax on business income, which is defined as the total revenue from business transactions as well as from independent professions after the deduction of any business expenses, depreciations and bad debts. The business income is taxed according to the following tax scale.

Taxable incomeTax rate
Up to €10,0009%
€10,001 to €20,00022%
€20,001 to €30,00028%
€30,001 to €40,00036%
€40,001 and above44%

Moreover, according to the ITC, any increase of wealth for an individual deriving from an illegal, unjustified or unknown source or cause is considered as income derived from business activities and is further subject to tax at 33 per cent.

Capital income

Capital income is a distinct category of income and includes the income, in cash or in kind, from dividends, interests, royalties and immovable property.

Income from dividends is defined as the income from shares, founders' shares, or other rights of participation in profits that are not debts, as well as income from other corporate rights, including interim dividends and actuarial reserves, profits from partnerships and any other distributed amount.

Income from interest is defined as the income on any kind of claims, either secured by mortgage or not, whether providing a right to participate in profits of the debtor or not. Specifically, this includes income from deposits, government securities, bonds (with or without security) and from every kind of loan agreement, including premiums, repurchase agreements or reverse repurchase agreements and rewards derived from shares, partnerships, bonds or securities. There is a tax exemption regarding the income by the interest of bond loans and treasury bills of the Greek state, received by individuals, as well as to the interest arising from bonds issued by the European Financial Stability Facility in application of the programme for the restructuring of the Greek debt.

Income from royalties is defined as the income gained in exchange for the use or the right to use any kind of intellectual property rights.

Income from real estate property is defined as the income (in cash or in kind) derived from leasing (rental), self-use or the free concession of the use of land or real estate property. The income received in kind is calculated at the market value. In addition, the income for self-use or the free concession of use is equal to 3 per cent of the objective value of the property. A tax exemption is applied to the aforementioned presumptive income in the case of the free concession of the use of the real estate property – which shall not exceed 200 square metres – to a relative in the ascending or the descending line, who will use it as his or her main residence.

The capital income earned by an individual is subject to withholding tax as follows:

  1. dividends distribution is subject to a withholding tax at the rate of 10 per cent, with effect for payments performed up to the tax year 2016, 15 per cent for the tax year 2017, 10 per cent for the tax year 2019 and 5 per cent for the tax year 2020 onwards exhausting any further tax liability for individuals (final tax);
  2. interest payments are subject to a withholding tax rate of 15 per cent, exhausting any further tax liability for individuals (final tax); and
  3. royalties payments are subject to a withholding tax at the rate of 20 per cent, exhausting any further tax liability for individuals (final tax).

Income from immovable property sourced by the leasing (rental) or by the self-using (presumptive income) of the real estate property is subject to income tax in accordance with the following tax scale, which is applicable to income gained from 1 January 2017.

IncomeTax rate
Up to €12,00015%
€12,001 to €35,00035%
€35,001 and above45%
Short-term lease: Airbnb

As of 1 January 2017, income from the short-term lease of real estate in the context of the sharing economy is taxed in accordance with the provisions of Article 39A of the ITC.

Specifically, rental income from the short-term lease of immovable property in the sharing economy is considered as taxable income deriving from immovable property, provided the immovable property is furnished when rented, without the provision of any additional service other than the provision of bed linen, and is taxed pursuant to the corresponding applicable tax scale (15 per cent to 45 per cent). If any additional services are provided, the income is considered as business income and taxed according to the corresponding applicable tax scale (9 per cent to 45 per cent).

Short-term lease of immovable property in the context of the sharing economy5 is exempt from value added tax (VAT), provided that, during the lease, the lessor does not provide additional services to guests similar to those offered in hotels, such as cleaning services, waste collection, changing linen and other customer care services. The supply of bed linen is not considered an additional service and therefore has no effect on the VAT exemption. Also, other utilities such as electricity, water and internet connection, which are charged to the host and subsequently passed on to the guest, are included in the value of the rental price and therefore are not considered additional services and do not affect the VAT exemption.

Capital gains income

Any surplus that arises from the transfer of capital (i.e., real estate property, securities, listed shares, sovereign bonds, interest-bearing bills, company bills or derivative financial products as described in the ITC) is considered income from capital gains and is subject to tax at a rate of 15 per cent. The taxable surplus is the difference between the purchase (acquisition) price and the transfer (selling) price. An exemption from the said tax is applied in special cases. For example, any capital gains derived from the transfer of securities by individuals could be exempted from capital gains tax if said individuals are tax residents of another state with which a DTT has been signed, and provided that all the necessary documentation is submitted to the relevant tax administration authority, evidencing the residence of the aforementioned individuals to these states.

Taxation on capital gains from the transfer of real estate property has been postponed until 31 December 2022.

Stock option and share award plans preferential tax regime

Stock option and share award plans constitute exceptional instruments for the provision of incentives to employees as well as an alternative form of compensation of executive members and directors, to strengthen their efficiency and productivity. The stock option and share award plans' preferential tax regime was recently interpreted by the Independent Authority Public Revenue Circular Pol. E 2208/2020.

As of 1 January 2020, no taxation arises upon granting, vesting or exercising of stock options. The taxation is deferred to the subsequent shares' transfer, which were acquired upon exercise by the beneficiary of the scheme.

The tax treatment depends on the holding period of the shares, starting from the grant date of the stock options up to the shares' transfer.

  1. If the shares are transferred prior to the completion of 24 or 36 months (for start-ups), from the grant date of the stock options, the income is taxable as employment income at a progressive tax scale up to the marginal rate 44 per cent applicable on salary income (special solidarity contribution on salaries income is suspended up to the end of 2022).
  2. If the shares are transferred after the completion of 24 or 36 months from the grant date of the stock options, the income generated is taxable as capital gain at a 15 per cent fixed rate (or 5 per cent for start-ups) and special solidarity contribution at progressive tax rates up to the marginal rate 10 per cent (special solidarity contribution on salaries income was suspended up to the end of 2021).

In the case of listed shares, the taxable value is the shares' market price on the exercise date minus the stock option exercise price (preferential acquisition value of shares), while, as for non-listed shares, the taxable base is the spread (i.e., the share's internal value on the exercise date when the shares were acquired), defined based on the company's internal net asset value (as reflected in its accounting books) minus the stock option exercise price (preferential acquisition value of shares). In addition, any subsequent gain on the sale of shares will be subject to capital gains tax at a 15 per cent fixed rate and special solidarity contribution at progressive tax rates up to 10 per cent.

With regard to share award plans, any gain on the sale of shares will be subject to capital gains tax at a 15 per cent fixed rate and special solidarity contribution at progressive tax rates up to 10 per cent, regardless of the time of shares' transfer following their free granting. In case of listed shares, the taxable value is the share market price at the time of the shares' free granting, provided the shares' sale price equals to or it is lower than the market price, while any positive difference between the shares' sale price minus share market price on the day of their free granting, provided the beneficiary participates in share capital with a percentage higher than 0.5 per cent, is subsequently subject to capital gains tax at a 15 per cent fixed rate. As for non-listed shares, the taxable base is the highest between shares sale price and internal value at the time of their free granting.

iii Special income tax provisions provided by the ITCAlternative method for determining minimum taxation (deemed income)

The ITC provides an alternative method for calculating the minimum tax obligation of individuals according to certain objective criteria. If, after application of those objective criteria, the deemed income of the taxpayer is higher than the declared income, he or she will be taxed according to his or her deemed income.

Deemed income may derive either from 'living expenses' from assets owned or from 'actual expenses' from the amount spent to purchase assets and is calculated after taking into account the following objective criteria:

  1. the surface area of the main residence of the taxpayer in combination with its tax value;
  2. the surface area of any secondary residences of the taxpayer;
  3. the size of the engines (e.g., 1,200cc, 1,400cc) of any cars of the taxpayer, in combination with the year of the car's production;
  4. salaries of housemaids and other staff;
  5. fees for private schools for the taxpayer's children;
  6. leisure boats;
  7. aeroplanes; and
  8. swimming pools.

Purchases of cars, motorcycles, boats, aeroplanes and other goods that cost above €10,000, the establishment or the participation in the capital increase of a company under the form of an unlimited or limited liability partnership or corporation or limited liability company or private corporation or society of civil law or joint venture or purchase of company parts or securities, as well as payments to insurance investment contracts, to the extent that they constitute investment product, are taken into account in the calculation of the taxpayer's annual deemed income. The taxpayer can, under certain conditions, cover the difference between actually declared income and income that is deemed after the application of the above rules, by showing that the amount in excess of the declared income is justified by savings made from income taxed in previous years.

Deemed income provisions are not applicable in the case of a foreign tax resident who does not earn income from Greek sources.

Controlled foreign companies

CFC rules were introduced in the ITC, with the aim of dealing with the tax avoidance of Greek companies or individuals, through shifting revenues to subsidiaries in low-tax jurisdictions.

It is specified that the taxable income of an individual Greek tax resident includes the non-distributed income of legal or other entities or permanent establishment, tax-resident in another state, provided that the following conditions are cumulatively met:

  1. the taxpayer, on his or her own or jointly with related persons, holds, directly or indirectly, shares, parts, participations, voting rights or participations in the capital at a percentage exceeding 50 per cent, or is entitled to receive a percentage exceeding 50 per cent of the profits of the said legal or other entity;
  2. the corporate tax actually paid regarding the profits of the above foreign legal person or legal entity or permanent establishment is less than the difference between the corporate tax that would be owed by the legal person or legal entity or the permanent establishment, according to the provisions of Greek law if this legal person, entity or permanent establishment was a Greek tax resident in accordance with Article 6 of the ITC and the corporate tax actually paid by the legal person or legal entity or permanent establishment regarding their profits; and
  3. a percentage exceeding 30 per cent of the net income before taxes realised by the legal entity or other entity falls under one or more of the following categories:
    • interest or any other income generated from financial assets;
    • royalties or any other income generated from intellectual property;
    • income derived from dividends and the transfer of shares;
    • income derived from movable assets;
    • income derived from finance lease;
    • income derived from invoicing companies that generate revenue from (1) sales of goods and services and (2) services purchased and sold to affiliated companies that do not add an economic value or add a minimum economic value; and
    • income derived from insurance, bank and other financial activities.

The above shall not apply to cases where the CFC is engaged in a substantial economic activity supported by personnel, equipment, assets and facilities, as evidenced by relevant facts and circumstances. However, the above provisions of the ITC shall apply if the CFC is a tax resident or maintains a permanent establishment in a third country that is not a party to the Agreement on the European Economic Area.

iv Solidarity tax contribution on individuals' income

As a result of the economic crisis, a special solidarity tax contribution was imposed on individuals' total income (both declared and deemed income from any source) that exceeded €12,000 on an annual basis. However, since 1 January 2020, this special solidarity tax contribution has applied to an individual's total income (from any source) from €0.

For income earned from 1 January 2020, a solidarity tax contribution is imposed in accordance with the progressive rates below.

IncomeTax rate
Up to €12,0000%
€12,001 to €20,0002.2%
€20,001 to €30,0005%
€30,001 to €40,0006.5%
€40,001 to €65,0007.5%
€65,001 to €220,0009%
€220,000 and above 10%

In addition, as of 27 May 2016, salaries and wages are subject to withholding tax against solidarity tax contributions in accordance with the above rates.

According to Circular E2009/2019, issued by the Independent Authority of Public Revenue, the special solidarity tax contribution of Article 43A of the ITC, as an income tax, is not imposed on income generated abroad by a Greek tax resident that is not subject to Greek income tax under the provisions of the applicable DTT. Also, the special solidarity tax contribution of Article 43A of the ITC is not imposed on income generated in Greece by a foreign tax resident that is not subject to Greek income tax under the provisions of the applicable DTT.

For the tax year 2021, the income of a natural person is exempt from the imposition of the special solidarity levy, with the exception of income from wage labour in the public sector and pensions, as recently amended under Article 121 of Law No. 4799/2021.6 This exemption extends to tax year 2022 for employment income in the private sector.

v Luxury living tax

As a result of the economic crisis, from the tax year 2014, a luxury living tax applies on individuals' income, calculated on the amounts of the annual deemed expenditures arising from the ownership or holding of private passenger cars, aeroplanes, helicopters, yachts and swimming pools, as follows:

  1. for passenger cars from 1,929cc to 2,500cc, a tax rate of 5 per cent is applied;
  2. for passenger cars more than 2,500cc, a tax rate of 13 per cent is applied (private passenger cars with more than 10 years' use since their first year on the road are exempted from said tax); and
  3. for aircraft, helicopters, swimming pools and yachts longer than 5 metres, a tax rate of 13 per cent is applied.
vi Real estate taxReal estate transfer tax

The rate of the real estate transfer tax (RETT) is 3 per cent calculated on the value of the real estate property. For tax purposes, a system has been established for the objective calculation of the value (i.e., based on a system of minimum values). According to this system, if contracting parties declare a price lower than the objective price, the taxes are based on the objective price (higher price). Lately, the actual sale prices of real estate in Greece have been significantly reduced and have been much lower than the objective values. As a result, the tax paid on the objective values provided by Greek law is higher than the tax that would be calculated on the actual sale price according to the contract. Further, a municipality surcharge equivalent to 3 per cent of the RETT also applies, thus leading to an effective transfer tax rate of 3.09 per cent. The buyer suffers the RETT, which should be paid as a lump-sum amount before signing the transfer deed. No tax benefit (deduction) is provided for this amount. Also, notary and land registry fees aggregately amount to approximately 1.1 per cent of the price agreed in the notarial deed (i.e., the consideration) or the objective (tax) value of the property for RETT purposes, whichever is greater. Notary and land registry fees are usually payable by the buyer. No tax benefit (deduction) is provided for this amount.

Annual real estate tax

Annual real estate tax (ENFIA) is imposed on real estate property rights and applies to real estate located in Greece that is owned by individuals and entities. ENFIA is payable on an annual basis. The tax payable depends on several factors.

Special tax real estate

A special tax applies on the value of real estate situated in Greece and owned by a company that has its registered seat at a non-cooperative state, as provided under Article 65 of the ITC, at a tax rate of 15 per cent. However, if the company discloses all its shareholders or ultimate beneficiaries (individuals) who hold a tax identification number in Greece, it is exempt from the special tax. Many other exemptions are also provided.