Taxes and Tax Schemes in Greece | What You Need to Know

Greece, a country renowned for its ancient history, stunning islands, and Mediterranean cuisine, also has a complex tax system. Located in Southern Europe, Greece is a member of the European Union and the Eurozone. The country has faced economic challenges in recent years but has been making steady progress in recovery.

Greece's economy is primarily service-based, with tourism playing a significant role. The country is also known for its shipping industry, agriculture, and small-scale manufacturing.

The expat community in Greece is diverse, with many foreigners attracted to the country's warm climate, relaxed lifestyle, and relatively low cost of living. Popular areas for expats include Athens, Thessaloniki, and various islands such as Crete and Corfu.

Remember, tax laws can change, and individual circumstances vary. Always consult with a qualified tax advisor for personalized advice.

Greece Income Tax

Greece employs a progressive income tax system. As of 2024, the tax rates for employment and pension income are as follows:

• Up to €10,000: 9%
• €10,001 to €20,000: 22%
• €20,001 to €30,000: 28%
• €30,001 to €40,000: 36%
• Over €40,000: 44%

For freelance professionals and self-employed individuals, a different scale applies, starting at 9% for income up to €10,000 and reaching 44% for income over €40,000.

Summary:

• Progressive tax system
• Rates range from 9% to 44%
• Different scales for employed and self-employed individuals

Greece Tax on Overseas Income

Greece taxes its residents on their worldwide income. This means that if you're considered a tax resident in Greece, you'll need to declare and potentially pay taxes on income earned both within Greece and abroad.

You're considered a tax resident if you meet any of the following criteria:

• You spend more than 183 days in Greece within any 12-month period
• Your vital interests (personal or economic) are in Greece
• You are a Greek civil servant posted abroad

Non-residents are only taxed on income earned within Greece.

Greece Tax on Investments

Investment income in Greece is generally subject to the following tax rates:

• Dividends: 5%
• Interest: 15%
• Royalties: 20%

Capital gains from the sale of securities are subject to a 15% tax rate.

Greece Capital Gains Tax

Capital gains tax in Greece applies to the transfer of real estate and securities. For real estate, the tax rate is 15% on the gain. However, there are several exemptions, including:

• Transfer of a primary residence (under certain conditions)
• Properties acquired before 1995

For securities, as mentioned earlier, the tax rate is 15% on the capital gain.

Summary:

• 15% tax rate on capital gains from real estate and securities
• Exemptions available for certain real estate transfers

Greece Special Tax Regimes

Greece offers special tax regimes to attract foreign investment and talent:

1. Non-Dom Regime: High-net-worth individuals who transfer their tax residence to Greece can opt for a flat tax of €100,000 per year on their foreign-source income.
2. Alternative Taxation for Foreign Pensioners: Retirees who transfer their tax residence to Greece can opt for a flat 7% tax rate on their foreign-source pension income for 15 years.
3. Tax Incentives for "Digital Nomads": Individuals who transfer their tax residence to Greece to work remotely can benefit from a 50% exemption on their employment income for 7 years.

Summary:

• Non-Dom Regime: €100,000 annual tax on foreign income
• Alternative Taxation for Foreign Pensioners: 7% flat tax on foreign pension income
• Digital Nomads: 50% tax exemption on employment income for 7 years

Tax Planning for Greece

When planning your taxes in Greece, consider the following strategies:

1. Utilize available deductions: Greece offers various tax deductions, including medical expenses and certain insurance premiums.
2. Consider the timing of residency: If you're moving to Greece, carefully plan when you establish tax residency to optimize your tax situation.
3. Explore special regimes: If you qualify, the special tax regimes can offer significant savings.
4. Seek professional advice: Given the complexity of the Greek tax system, it's advisable to consult with a tax professional familiar with both Greek tax law and your home country's regulations.
5. Keep detailed records: Maintain comprehensive documentation of your income, investments, and expenses to ensure accurate reporting and to support any claims for deductions or exemptions.

FAQs About Taxes in Greece

What is the VAT rate in Greece?

The standard VAT (Value Added Tax) rate in Greece is currently set at 24%. However, reduced rates of 13% and 6% apply for certain goods and services.

Are there any inheritance taxes in Greece?

Yes, Greece has inheritance taxes. The rates range from 1% to 40%, depending on the relationship between the deceased and the heir and the value of the inheritance.

Do I need to file an annual tax return in Greece?

Yes, if you are a tax resident in Greece or have income sourced in Greece, you are generally required to file an annual tax return.

Is it possible to get double taxation relief?

Yes, Greece has signed double taxation treaties with many countries to prevent double taxation on income earned abroad. Check if such an agreement exists between your home country and Greece.

How do I register as a taxpayer in Greece?

To register as a taxpayer in Greece, you need to obtain a Greek Tax Identification Number (AFM - Αριθμός Φορολογικού Μητρώου) from the local tax office.

निष्कर्ष

Understanding the taxation system in Greece is crucial for both residents and expats. With its progressive income tax structure and various special regimes designed to attract foreign talent and investment, navigating this landscape can be complex but manageable with proper planning. By being aware of your obligations regarding overseas income and investments while utilizing available deductions or special regimes where applicable, you can optimize your financial situation in this beautiful Mediterranean country. Always consider seeking professional advice tailored to your individual circumstances for best results.

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