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Taxation

Taxes on income

Greek tax residents-individuals are subject to income tax on their worldwide income. Non-Greek tax residents-individuals are taxed in Greece only on their Greek-source income, if any.

Tax year and filing

Tax year in Greece coincides with the calendar year. Tax returns should be filed by Greek tax individuals by 30 April of the year following the relevant fiscal year.

When business income is declared in a tax return at the level of an individual taxpayer, the latter is liable to a 100% advance payment of the income tax that corresponds to said income for the relevant tax year.

The final tax liability of an individual is determined on the basis of the computed amount by the tax authorities and after the deduction of any advance payment, withholding tax or foreign tax which have been paid abroad.

The payment of income tax liability is usually made in three equal installments.

Residence and non-residence

As per the Greek legislation, there are several criteria that are taken into consi- deration in order for an individual to be considered as tax resident in Greece, among the most important of which are the followings:

  • if his/her permanent home or center of vital interest is in Greece;

  • if his/her habitual adobe is in Greece, by the meaning that he/she lives in Greece for a period of more than 183 days during the fiscal year, which coin- cides with the calendar year. It is not necessary for an individual to stay in Greece for 183 consecutive days in order to be considered as a Greek tax re- sident. After said threshold has been transcended the individual is conside- red as being a tax resident in Greece as from his first day of the 183-period.

In case of a conflict as regards the residency status of an individual who might be considered as a tax resident in Greece and also in another country (i.e. “dual residency”), the solution can be given through double tax treaties that Greece has signed with other countries (for the moment up to 56 double tax treaties have been signed by Greece).

Types of income

According to the Greek tax legislation, there are four (4) categories of income at the level of Greek individual taxpayers. In particular:

Employment and pension income

Employees are liable to tax as regards their income from salaries, wages, al- lowances, pensions and any other remuneration that is periodically paid in cash or in kind for services rendered and certain other income items.

In general, the employees are taxed on the market value of the benefits in kind received either by the employee or by a relative of the employee, provided that the total value of all the benefits in kind received in a year exceeds EUR 300 (per

year). However, there are special rules in the Greek tax legislation as regards certain benefits in kind (e.g. Company cars, “deemed” loans to employees, stock options to employees and housing provided by the Employer).

The tax rates and relevant thresholds that have been set for the employment income are listed below:

 

Income for employment

Tax rates

0 – 20,000

22%

20,001 – 30,000

29%

30,001 – 40,000

37%

40,001 –

45%

 

A tax credit is available for Greek tax individuals that earn income from employment (for more details please refer to section 2.7 below).

Business income

Individuals, exercising business activities are subject to income tax on business income, which is determined by the total revenue from business activities after the deduction of business expenses, depreciation and bad debts (under certain conditions). The tax rates for business income are the same with the employ- ment income as mentioned above (please see the table above).

Income from agriculture and forestry

Income earned from agricultural business is considered, from a tax point of view, as business income, for the determination of which the revenues from business transactions include revenue from the production of agricultural, poultry, lives- tock, forestry, logging and fishing products.

Income from capital (passive income)

Individuals are liable to tax for the income received in a tax year from dividends, interest, royalties and immovable property.

In particular:

  • Dividends are subject to a final withholding tax of 15% (but solidarity tax is assessed in addition to the withholding tax on assessment of the personal income tax return filed annually).
  • Interest is subject to a final withholding tax rate of 15%, with no further personal income tax liability for individuals (but solidarity tax is assessed in addition to the withholding tax on assessment of the personal income tax return filed annually).
  • Royalties are subject to a final withholding tax rate of 20%, with no further personal income tax liability for individuals (but solidarity tax is in addition to the withholding tax on assessment of the personal income tax return filed annually).
  • Income from fixed assets is considered to be any income, in cash or in kind, received by an individual for leasing, self use or free disposal of immovable property. Said income is taxed accordingly:

 

Income from fixed assets (EURO)

Tax rate%

0 – 12,000

15%

12,001 – 35,000

35%

35,001 –

45%

 

Presumptive income

The declared income at the level of individual taxpayers is compared with the so-called “presumptive income” which is formed by the costs of assets’ acquisition and the expenses for living. Any difference that might occur between the comparable incomes will be taxable at the level of the individual taxpayer.

Income from unknown source

In case the income of the individual is increased from unlawful or unjustified or unknown source or cause is treated, from a tax point of view, as business profit and it is taxable at a 33% tax rate.