• Service: Tax, Global Mobility Services
  • Type: Business and industry issue, Regulatory update
  • Date: 1/1/2014


Persons residing in Greece are liable for income tax on their worldwide income, whether remitted to Greece or not. Where tax has already been paid outside Greece on non-Greek-sourced income, the tax may be deducted up to the amount of tax payable in Greece on the same income.


Non-residents are taxed only on Greek-sourced income.


The determination of residency status in Greece is based on a “number of days rule” If the respective. individual has his residence or habitual residence in Greece, then the residence of an individual for tax purposes is Greece. An individual who is present in Greece for a period exceeding 183 days, inclusive of any short term period of residence abroad, is considered as Greek tax resident as of the first day of his arrival in Greece.

Furthermore, the new law provides that non-Greek tax residents will be obliged to file documentation supporting their non-Greek tax residency status with the Greek tax authorities. Respective documentation will be indicated via a ministerial decision, which has not been published yet. Even though respective ministerial guidance has not been issued yet, based on last year’s instructions, the documents required to support non-Greek tax residency status may be either of the following:

  • a copy of the submitted tax return in home country.
  • an assessment note in the home country.
  • a certificate issued by any public authority certifying that the individual is tax resident in respective country.

Based on the old provisions such documentation should be co-submitted along with the tax return submitted for respective year.


Key message

The rules governing the individual’s income taxation will be determined by reference to the individual’s tax residency status (i.e. Greek tax resident or non-Greek tax resident).


Income tax

Liability for income tax

The rules governing the individual’s income taxation will be determined by reference to the individual’s tax residency status (i.e. Greek tax resident or non-Greek tax resident).

Tax trigger points

The taxability of employment income of non-Greek residents is determined by reference to the applicable double tax treaty for the avoidance of double taxation (if any).

On the assumption that the individual is registered as a non-Greek tax resident and in case of future tax audit, the Greek tax authorities might require tax residency certificates for the individual in order to evidence/support that the individual is tax resident (and therefore subject to tax on the individual’s worldwide income) in another jurisdiction/state. An individual who is not in a position to provide the requisite documents will automatically be classified as a Greek tax resident by the tax authorities, who will seek to assess tax on the individual’s worldwide income plus penalties (if applicable) for inaccurate filings (when due).

New tax residence provisions

The definition of tax residence is introduced on the basis of the Organisation for Economic Co-operation and Development (OECD) Guidelines. The concept of usual (permanent) residence is determined for tax purposes in Greece if someone resides in Greece for more than 183 days in total including his/ her short term stay abroad.

However, respective provision is not applicable in case of individuals who are present in Greece only for tourism, medical, medicinal or equivalent personal purposes on condition that their presence does not exceed the 365 days threshold.

Types of taxable income

Taxable income is classified into four categories:

  • Employment income and pensions
  • Business activity
  • Capital
  • Capital gains

Married persons are subject to tax separately on their own income but are required to file a joint tax return.

Additionally, all individuals over 18 years of age are obliged to file an income tax return irrespective of whether they are subject to tax or not.

Tax rates

Each income category is separately computed and subject to tax.

For each category the tax rates are indicated below.


Employment income and pensions

For employment/ pension income a progressive tax scale is applicable to both Greek and non-Greek tax residents, with no tax free bracket, as provided in the table below:

Income bracket Tax rate Tax per
Aggregate Income Aggregate Tax
First 25,000 22% 5,500 25,000 5,500
Next 17,000 32% 5,440 42,000 10,940
Exceeding 42,000 42%                                     -                  -            -

Source: KPMG in Greece, 2014

A tax credit of EUR2,100 is introduced. This is given in full to employees and pensioners with annual income up to EUR 21,000. For income exceeding EUR21,000, the amount of tax credit is limited to EUR100 per EUR1,000 of income and up to the elimination of the amount of EUR2,100. Only for tax year 2014, there is also an obligation to collect receipts and is stipulated that the amount of receipts required are set to 10 percent of the taxable income for each individual. The maximum amount of receipts required is set to EUR10,500. In case of failure to collect the required amount of receipts a penalty of 22 percent will apply on the remaining value of receipts not collected.


Business activity

Business activity income is subject to tax according to a separate tax scale which is as follows:

  • for income up to EUR50,000 the applicable tax rate is 26 percent.
  • for the part of the income exceeding EUR50,001 the applicable tax rate is 33 percent.

However, for new private businesses and entrepreneurs with commencement date as of 2013 onwards and for the first 3 years of their operation the tax rate of the first scale is reduced by 50 percent for income up to EUR10,000.

Income earned from private agricultural business is subject to tax of 13 percent. However, by exemption for the fiscal year 2014 (income earned in 2013) the tax scale for employees – pensioners applies.




  • Dividends are subject to withholding tax at the rate of 10%.
  • Interest is subject to withholding tax at the rate of 15%.
  • Royalties and other fees paid to advisors and construction entities as well as management fees are subject to withholding tax at the rate of 15%.
  • Rental income is taxed at the rate of 11% for income up to EUR12000 and 33% for income exceeding EUR12000.

Capital gains

Capital gains arising from the transfer of real estate, securities and derivatives is taxable at the rate of 15%.


Liability for social security

According to Greek law, all employers must register their employees with the relevant Greek social security fund on commencement of employment in Greece. In addition to the basic social security funds, employed persons must also be covered by a supplementary insurance fund. The main funds applicable to employed persons are the Social Insurance Fund (IKA) and the Employees’ Supplementary Insurance Fund (TEAM). All employers are required to register their employee with IKA in the area where their operations are located.

Their registration with and contributions to TEAM are dealt with by the IKA offices.


Compliance obligations

Employee compliance obligations

As of 1 January 2015 personal income tax returns must be filed electronically up to 30 April of the year following the end of the relevant tax year. The tax year for individuals is the calendar year.

Employer reporting and withholding requirements

Under Greek tax law, employment income is taxable in the hands of the employee in the year in which the employee is entitled to claim such income, whereas income tax withholding should be effected by the employer. Employers are under an obligation to withhold Greek income tax on the remuneration paid to employees in Greece on a monthly basis (in Greece, salary is payable 14 times per year).

Amounts of payroll tax withheld on a monthly basis should be remitted by the employer to the tax authorities by the end of the second month following the month that income was paid, at the latest.


Other issues

Work permit/visa requirements

Citizens of EU member states, of the states of the European Economic Area (i.e., Iceland, Liechtenstein, and Norway), and Swiss citizens must apply for the appropriate type of certificate of registration of EU citizens (i.e., for the provision of dependent employment services, for the provision of non-salaried services, etc.) if they wish to work in Greece or decide to take up residence in Greece. A visit of up to 3 months does not require a permit.

Citizens of countries outside the EU must apply for work visas before arriving in Greece if they wish to work in Greece and apply for a resident permit immediately upon arrival.

Because the application procedure for work visas is lengthy, the procedure should be commenced well in advance of the planned date of arrival.

Some non-EU citizens may require visas to enter the country even for vacations or short business trips.

Double taxation treaties

Greece has entered into double taxation treaties with 55 countries to prevent double taxation and allow cooperation between Greece and other tax authorities in enforcing their respective tax laws.

Permanent establishment implications

The definition of permanent establishment is introduced on the basis of the Organization for Economic Co-operation and Development (OECD) Guidelines. Permanent establishment is defined as the fixed place of business through which the business of an enterprise is wholly or partly carried on.

The term permanent establishment includes mainly:

  • a place of management
  • a branch
  • an office
  • a factory and
  • a workshop
  • a mine, an oil or gas well, a quarry or any other place of extraction of natural resources

These criteria are superseded by the provisions of the double taxation treaties concluded by Greece with other countries, which may include a narrower definition of a permanent establishment.

Indirect taxes

Indirect taxation provides more than 50 percent of the state’s tax revenue.

A value-added-tax (VAT) was introduced in Greece in 1987 and is the most important indirect tax. The basic VAT rate applicable to all goods and services is 23 percent, except for some goods where a reduced rate applies.

Transfer Pricing

Based on a recently enacted tax law, new provisions for transfer pricing were introduced. In particular, it is provided that the new transfer pricing provisions apply for transactions carried out within financial years commencing as of 1 January 2012 onwards. In accordance to the provision of the new tax law, the intercompany transactions with one or more associated enterprises are exempted from the documentation obligation arise for any company in Greece, if they do not exceed the amount of:

  • EUR100,000 in total, if the gross revenues of the tax year for all associated enterprises does not exceed the amount of EUR5,000,000.
  • EUR200,000 if the gross revenues of the tax year for all associated enterprises exceeds the amount of EUR 5,000,000.

The Transfer Pricing Documentation File must be prepared before the issuance of the Tax Certificate and in all cases, within 4 months from the closing date of the financial year of the enterprise. The aforementioned Documentation File is accompanied by a Summary Information Sheet which must be electronically submitted to the General Secretariat of Information Systems of the Ministry of Finance, within the same deadline that is provided for the preparation of the Transfer Pricing Documentation File and applies for financial statements closing after 30 December 2012. Additionally, the Transfer Pricing Documentation File must be submitted upon an audit to the competent tax authority within 30 days upon request and respective audits will be carried out by the Tax Office for Large Incorporations. Under the provisions of the Ministry of Finance, if the Greek tax authorities challenge a company’s intra-group transactions, then the following may occur:

  • The company’s taxable profit will be adjusted for any differences that may arise in respect of these transactions.
  • The company will be liable for the payment of additional taxes and fines calculated on the amount of tax so assessed.
  • Penalty of EUR1,000 to EUR10,000 calculated at a rate of 0,1 percent on the enterprise’s recorded gross profits is imposed for late submission of the Summary Information Sheet as well as for late submission of the Transfer Pricing Documentation File to the competent audit authority within the 30 days deadline.
  • Penalty of EUR10,000 to EUR100,000 calculated at a rate of 1 percent on the enterprise’s recorded gross profits is imposed in case the Summary Information Sheet or of the Transfer Pricing Documentation File is not submitted to the competent audit authority.

Local data privacy requirements

Services performed within Greece shall comply with the provisions of the Greek and EU legislation regarding the protection of personal data. Greece has incorporated European directives regarding the protection of personal data.

Exchange control

There are no foreign exchange control restrictions. However, all monetary transfers abroad must be effected through commercial banks in Greece. When approving such transfers, commercial banks are obliged to ensure that the payment has been subject to or are exempt from withholding tax.

Payments and other transfers relating to current transactions between residents and non-residents must also be made through commercial banks operating in Greece, which may ask for certain supporting documentation (related to the authenticity of the transaction) prior to making payments.

Non-deductible costs for assignees

Non-Greek residents are not allowed any tax credits, unless they are tax residents of the European Union or the European Economic Area and

  • earning more than 90 percent of their global income in Greece, or
  • proving that their taxable income is that low, that they should be eligible for to tax deductions according to the tax legislation if country they reside in.

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Georgia Stamatelou


KPMG in Greece

+30 210 60 62 227

Thinking Beyond Borders