The tax system in Greece

One of the long-standing problems in Greece has been lax taxation and tax evasion. But since 2010, the government has implemented (and keeps implementing) a significant number of new tax measures. The changes that occurred at the beginning of 2017 involved higher value-added taxes, duties on tobacco products, coffee, and automotive fuels, and a higher surcharge on broadband, subscription TV, and landline telephone bills.

Similarly, following EU pressure, Greece introduced an updated Tax code in 2018. Through its implementation, it was hoped that the taxation process could be simplified, along with decreasing the amount of taxes paid by businesses and people. Secondly, the code introduced measures to challenge tax evasion and stricter penalties for non-adherence to tax rules and regulations. It is important to consult with your accountant at all times to be aware of the current tax situation in Greece and how it may affect you.

Who pays tax in Greece?

Individuals and businesses are obligated to pay taxes in Greece. Whether you are a resident or non-resident, you still must pay taxes in Greece. There are taxes on income, property – both moveable and immovable, capital gains, gifts, inheritance, interest, etc.

Conditions for paying taxes in Greece

To pay taxes in Greece, you'll need one of the following:

• permanent residence in Greece;
• to have spent over 183 days in the country during any calendar year;
• to be employed or carrying out paid professional activities in Greece (unless they're secondary to business activities conducted in your home country)'
• to have investments or business in Greece; or
• to have an annual income of over 3,000 euros that comes from salaries, pensions, self-employment, alimony from a spouse (child support is not included), or agricultural activities.

Even if you have no taxable income, you still need to file a tax return if you own a car (a motorcycle, a boat, or an aircraft), property, you are a partner in a limited liability company, you're buying or constructing a building, earning income by letting property or land or own a swimming pool that's bigger than 25m² (you must declare an income of at least 11,600 euros for an outdoor pool and 17,400 euros for an indoor one).

If you are taxed in Greece only on your Greek source income, you are no longer required to provide the Greek tax authorities with documentation supporting your non-Greek tax residence status: you are only subject to tax on income from Greek sources. Greece has double-taxation treaties with several countries, including Argentina, Austria, Belgium, Canada, Cyprus, the Czech Republic, Denmark, Egypt, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, the Republic of Korea, Luxembourg, the Netherlands, Norway, Poland, Romania, the Slovak Republic, Sweden, Switzerland, the United Kingdom and the US.

Read also Working as a digital nomad in Greece

Types of taxes in Greece

In general, individual taxpayers in Greece have to pay the following:

• income tax (see above the point for annual income)
• social security tax, deducted at the source
• capital tax (tax on inheritance/gifts inter vivos/lottery gains and tax on the transfer of real property)
• value-added tax (VAT), which is an indirect tax applying to the basic price of all products and services available in the country

Income tax in Greece

Subject to tax is your total net income that is produced in Greece or abroad. The income taxed is the sum of income from all sources after deducting certain recognized expenses related to that income. The sources of income are categorized in the Greek Income Tax Code (I.C.T.) as follows:

• property
• financial instruments/mobile values
• business activities
• agricultural activities.
• salaried services
• services of liberal professionals and any other sources

Read also Working in Greece

Tax brackets in Greece

Through the income tax code, income is allocated into categories:

1. income from salaried work and pensions
2. Income from business activity.

The brackets for 2022 were as follows (this keeps changing, so please consult your accountant):

• From 0-20,000 euros (or 9,091 for people with children) per annum - 22 %
• From 20,001 to 30,000 euros per annum - 29 %
• From 30,001 to 40,000 euros per annum - 37 %
• Beyond 40,001 euros per annum - 45 %

Rental income in Greece

If you are an individual considering renting out property in Greece, you will be taxed on your income from the property that you rent:

• 0-12,000 euros, the tax rate is 15%
• 12,001-35,000 euros, the tax rate is 35%
• 35,001 euros and upwards, the tax rate is at 45%

Whilst Greek residents are taxed on all their income (including international streams), non-Greek residents pay tax only from the income they receive within Greece.

Tax dates and deadlines in Greece

Tax is imposed every financial year for income produced during the previous year. The financial year in Greece is between the 1st of January and the 31st of December of the same calendar year (article 3 of the ICT). The deadline for filing your taxes usually gets an extension (this year got extended up to 17 July), but you should check with your accountant for specifics. Remember that if you're self-employed, you need to file your taxes 5 times a year — once at the end of every quarter and once at the end of the year like everyone else.

How to pay tax in Greece: guide

You must have received a tax statement or note from the Greek Tax Authorities (AADE) to pay your taxes in Greece. On the statement, there is a number which is the payment ID; it is 30 digit number. In Greek, it is known as taftotita ofilis or Ταυτότητα οφειλής (TO), with the literal meaning being tax identity because the number is specific to the tax being paid.

It is easy to find your T.O. number because the first nine digits are your Tax Identification number – your AFM or ΑΦΜ.

Important:

Unless you have an accountant in Greece working on this for you, you must be able to understand the form in Greek.

Below are listed a few terms that might be listed on your tax payment note or payment ID so you make sense of it:

• Ονομα: Name
• ΑΦΜ: Tax Identification Number
• ΟΦΕΙΛΕΣ ΠΡΟΣ ΤΟ ΔΗΜΟΣΙΟ: Taxes
• Συνολικό ποσό οφειλής εντός και εκτός ρύθμισης: Total amount of tax
• ΣΤΟΙΧΕΙΑ ΕΚΤΟΣ ΡΥΘΜΙΣΗΣ: Amount of Tax pro-Settlement
• Μη ληξιπρόθεσμο υπόλοιπο οφειλής: Non-overdue tax amount
• Ληξιπρόθεσμο υπόλοιπο οφειλής: Overdue tax amount
• Προσαυξησεις, τοκοι, τελη: Surcharges
• ΣΤΟΧΕΙΑ ΡΥΘΙΣΕΩΝ: Amount of debt in settlement
• Συνολικο ρυθμιζομενες πσσο βασικης οφειλης: Total tax amount in settlement
• Ρυθμιζομενες προσαυξησεις, τοκοι, τελη: Surcharges in the settlement
• Συνολικο ποσο οφειλης εντος ρυθμισης: Total amount remaining in the settlement
• Ημ/νια ληξης: Expiry or Due date of payment
• Υπολ. Δοσης: The remaining amount of the monthly settlement
• Προσαυξησεις: Surcharges
• Συν. Υπολοιπο: Total amount of payment
• ΕΝ.Φ. Ι. Α. (Ν. 4223/2013): Taxes related to Property
• ΕΙΣΟΔΗΜΑ Φ.Π. & ΕΙΔ. ΕΙΣΦ.Ν.3986/11 & Τ.Ε: concerning Income Tax

Once you have understood which tax or taxes you are paying, the next step is to pay your taxes through the Taxisnet portal. Again, to pay your taxes in Greece, you must have a Tax Identification Number (AFM), along with credentials to login onto the Taxisnet platform.

Good to know:

You must have a tax identification number to be employed legally in Greece, to invest in or buy property, and to open a bank account in Greece.

You must then log in with your AFM and credentials on the Taxisnet website. After this, you will see the tile labeled – προσωποποιημένη πληροφόρηση (personalized information) — this is the first option you must select.

Next, on the platform, you will see two options:

1. Οφειλές εκτός ρύθμισης και πληρωμή, which means that tax that is not included in the settlement

Or

2. Οφειλές σε ρύθμιση και πληρωμή for tax that is in the settlement.

On selecting your preferred option, a window will open with the taxpayer's Tax identification number and the total amount of taxes to be paid.

After this, the taxpayer must click the option εξόφληση, which means ‘payout', and then you will see the total amount of tax you are due to pay. To reach the payment portal, you have to select Έλεγχος και πληρωμή. Finally, you can select the box that says πληρωμή, which means pay.

With this step complete, you will be faced with an online form asking for your card payment details so you can pay the taxes. Payments within the Greek Tax Authority's Taxisnet portal can be from banks such National Bank of Greece, Piraeus Bank, Eurobank, Attica, HSBC, and many others. In most cases, you will have one of these Greek banks, but if you are with another, then you should check with that bank to see if the payment will be accepted.

Following a successful payment, a box will appear that will say Εκτύπωση, which means ‘print' giving you the option of having a paper confirmation of the taxes you have just paid.

Taxes can also be paid through your Greek bank's e-banking system — this can be achieved through the SEPA portal (Single Euro Payments Area).

How to find a tax accountant in Greece

As alluded to, most Greeks who need to file and pay taxes have an accountant to do the work for them despite the availability of the online portal – this emphasizes the arduous nature of the process in Greece. Paying your taxes as a foreigner in Greece can be even more challenging, especially if you are unfamiliar with tax regulations and do not have a good understanding of Greek. Therefore, finding the right accountant to meet your taxation needs is important. Ask any Greek, and they would advocate using an accountant as they can do the job more efficiently, but above all, correctly.

Greek Accountants is a website that provides a list of certified Greek Accountants, with which you can tailor your search to your nearest city in Greece.

On average, accountants in Greece are paid 18-20 euros hourly, so you would be looking at a fee of around 60 euros for an accountant to do your monthly taxes.

Is the tax system beneficial to Greeks, residents and businesses in Greece?

Generally, Greece's tax system is not deemed beneficial to residents or businesses. The system lacks a clear structure and is very complicated; this is in tandem with high tax rates and the authorities struggling to enforce the collection of taxes. Due to the nature of the Tax System, large numbers of companies and businesses have found it difficult to meet the regulations, which has resulted in a high rate of non-adherence to tax codes and extensive tax evasion, with the latter becoming synonymous with Greece.

Greeks have to suffer high tax rates and face long waiting times if they are owed a tax rebate or return — this contributes to the attitude of disillusionment and frustration people hold towards the Greek tax system.

Further, Greece's problems with taxes are a feedback loop towards the greater problems internal problems of the state. To illustrate, the high levels of tax are made up of a combination of the steep levels of public debt, a fragile economy and high rates of government spending. Undoubtedly, as Identified by the EU, these issues were in part responsible for the economic crisis suffered by Greece. Also, these factors, coupled with an inefficient and overly complicated taxation system, fail to follow tax codes and, ultimately, tax evasion. Correspondingly, to remedy the issue of loss of revenue, the government has then had to raise taxes, accentuating this negative feedback loop.