Income Taxation

Income taxation for individuals and all types of legal entities is regulated by Law 4172/2013 (Income Tax Code).

Persons who are tax residents in Greece are subject to tax for their taxable income arising in Greece and abroad.

Persons who are not tax residents in Greece are subject to tax for their taxable income arising in Greece.

Taxable income is what remains after deducting expenses recognised as deductions from gross income.

1. Income of Individuals

Individual Income Tax is levied annually on the income earned by individuals.

Tax Reductions

Tax reduction is provided under conditions for donations of money or food to specific bodies.

Also, an additional tax reduction of two hundred (200) euros is provided for the taxpayer and his/her dependents for certain categories of disability.

In addition, a special tax reduction is provided for certain sources of income (Article 16).

Incentives are also available for foreign tax residents who transfer their tax residence to Greece, under conditions. (Articles 5A, 5B, 5C)

1.1. Income from Employment and Pensions

Income from employment and pensions is income of any kind, whether in cash or in kind, earned in the context of an employment relationship.

Certain amounts, such as the allowance for travel, accommodation and subsistence expenses, are excluded from the calculation of income from employment and pensions. Also certain categories of income from employment and pensions, such as benefits for the unemployed and disabled and vulnerable groups in general, are exempt from tax.

Tax Rate

Taxable income from employment and pensions is taxed according to the following scale:

Income

Tax Rate

0 – 10.000

9%

10.001- 20.000

22%

20.001 – 30.000

28%

30.001 – 40.000

36%

40.001 –

44%

The tax resulting from the above scale is reduced by the amount of seven hundred and seventy-seven (777) euros for the taxpayer without dependent children. The tax reduction amounts to eight hundred and ten (810) euros for a taxpayer with one (1) dependent child, nine hundred (900) euros for two (2) dependent children, one thousand one hundred and twenty (1.120) euros for three (3) dependent children and one thousand three hundred and forty (1.340) euros for four (4) dependent children. For each additional dependent child after the fourth, the tax reduction shall be increased by two hundred and twenty (220) euros for each subsequent child. If the amount of the tax is less than these amounts, the tax reduction shall be limited to the amount of the tax due.

From tax year 2024 onwards, the following apply: the tax resulting from the above scale is reduced by the amount of seven hundred and seventy-seven (777) euros for the taxpayer without dependent children. The tax reduction amounts to nine hundred (900) euros for a taxpayer with one (1) dependent child, one thousand one hundred and twenty (1.120) euros for two (2) dependent children, one thousand three hundred and forty (1.340) euros for three (3) dependent children, one thousand five hundred and eighty (1.580) euros for four (4) dependent children and one thousand seven hundred and eighty (1.780) euros for five (5) dependent children. For each additional dependent child after the fourth, the tax reduction shall be increased by two hundred and twenty (220) euros for each subsequent child. If the amount of the tax is less than these amounts, the tax reduction shall be limited to the amount of the tax due (Article 43 of Law 5045/2023).

For taxable income from employed services and pensions exceeding the amount of twelve thousand (12.000) euros, the amount of the deduction is reduced by twenty (20) euros per thousand (1.000) euros of taxable income from wages and pensions.

1.2. Income from Business Activity

Profits from business activity are the total income from business transactions after deduction of business expenses, depreciation and provisions for doubtful receivables. Income from business transactions includes the proceeds from the sale of the assets of the enterprise and the proceeds of its liquidation as they arise during the tax year.

If the result of the resulting business activity is a loss, it is carried forward to be offset against the business profits successively in the next five (5) tax years.

Deductible Business Expenses

When determining the profits from business activity, deduction is allowed for all expenses, which:

a) are carried out in the interest of the business or in the ordinary course of its business,

b) correspond to an actual transaction and the value of the transaction is not considered to be below or above market value, based on the information available to the Tax Administration,

c) have been recorded in the accounting books in the period in which they are carried out and proven by appropriate supporting documents.

Research and development expenses are deductible from the profits from business activity at the time they are incurred, in the form of an increased deduction of one hundred percent (100%), apart from the usual deduction of these deductions from the gross income of business activity

An increased deduction for certain expenses relating to employees and environmental protection (Article 22B of the Income Tax Code) and an increased deduction, subject to the conditions set out, for expenses relating to green economy, energy and digitalization (Article 22E of the Income Tax Code) are also provided for.

Non-deductible expenses are explicitly mentioned in Article 23 of the Income Tax Code.

Tax Rate

Profits from business activity are taxed according to the following scale, after adding any income from wages and pensions. The tax reductions that apply to income from wages and pensions do not apply to business profits.

Income

Tax Rate

0 – 10.000

9%

10.001- 20.000

22%

20.001 – 30.000

28%

30.001 – 40.000

36%

40.001 –

44%

Minimum amount of net income from individual business activity

For business income arising from tax year 2023 onwards, there is a minimum presumptive net business income of individuals. This minimum income is calculated based on three parameters:

  1. First of all, the self-employed taxpayer is presumed to obtain an income of at least equal value either to that of a worker paid the minimum wage or to that of the taxpayer’s worker.
    Specifically, the larger amount of the two calculations below is taken into account, resulting from the following (and up to the amount of 30,000 euros):
    A. The annual amount of the gross minimum wage, which is increased i) by ten percent (10%) for the 3 years following the first six years of business activity, ii) by an additional ten percent (10%) for the three years following the first three-year period (following the first six years) and iii) by an additional ten percent (10%) for the years following the second three-year period (after the first six years).
    B. The amount corresponding to the total wages of the employee with the highest wages of the business in question.
  2. In addition, a percentage of ten percent (10%) is added on the total annual wages’ costs of the business in question and up to the amount of 15,000 euros.
  3. Finally, an amount corresponding to five percent (5%) is added on the amount by which the taxpayer’s turnover exceeds the average annual turnover of the respective industry. For the last increase, special treatment is provided for taxpayers who sell tobacco products at retail.

In any case, the total of the above presumed income cannot exceed the amount of fifty thousand euros (€50,000) per year.

The above calculation of presumptive income is debatable and specific conditions are provided where the taxpayer can prove incidents that objectively lead to a reduction in business activity, such as indicatively military service, prison, hospitalization, pregnancy and puerperium, adoption and fostering of children, natural disasters, etc. Furthermore, for the rebuttal of the minimum net income determined above, the taxpayer may submit an application, if there are special reasons, to the competent tax authority to carry out an audit during the disputed years.

Finally, cases are expressly provided in which the minimum net income does not apply (indicative: agricultural professional activity, disability of 80% or more, etc.).

From the minimum net income calculated above, any income from wages and pensions as well as income from agricultural activity is deducted.

In addition, other cases are expressly provided that reduce the minimum net income from business activity (indicative: first years of professional activity, disability of 67% or more, with many children, single-parent families, etc.).

Especially for the year 2024, there is a reduction by half of the amount of advance tax, in which the presumptively calculated income exceeds the declared one.

1.3. Capital Income

Capital income includes income earned by an individual in the tax year in cash or in kind in the form of dividends, interest, royalties, as well as income from immovable property.

Dividends Income

Dividends are subject to a withholding tax of five percent (5%).

The term “dividends” means any income arising from shares, founders’ titles, or other rights participating in profits not being debt-claims, as well as income from other corporate rights, including shares, dividends, prepayments and mathematical reserves, shares in the profits of personal enterprises, distributions of profits by any legal person or legal entity, and any other related distributed amount.

If the distribution of dividends is subject to withholding tax, the withholding tax exhausts the tax liability only for individuals and for the specific type of income of the taxpayer.

Interest Income

Interests are subject to a withholding tax of fifteen percent (15%).

The term “interests” means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular income from deposits, government securities, bonds and debentures, whether or not secured by collateral, and all types of borrowing relationships, including premiums, repos and rewards arising from securities, bonds or debt instruments.

If interests are subject to withholding tax, the withholding tax exhausts the tax liability only for individuals and for the specific type of income of the taxpayer.

Interests on bond loans and promissory notes of the Greek State acquired by individuals are exempt from income tax.

Royalties Income

Royalties are subject to a withholding tax of twenty percent (20%).

The term “royalties” means income obtained in return for the use of, or the right to use, intellectual property rights in literary, artistic or scientific work, including cinematograph and television films, radio and video tapes, software for commercial exploitation or personal use, patents, trademarks, privileges, designs,  or models, blueprints, secret chemical formulae or processes, or in exchange for information concerning industrial, commercial or scientific expertise, payments for the use of industrial, commercial or scientific equipment, for the use of technical methods of production, technical or technological assistance, know-how, research results, republication of articles and studies, as well as payments for consultancy services provided electronically via computer networks to a problem-solving database, electronic downloading of computer software, even where the goods in question are acquired for the personal or professional use of the purchaser, the leasing of industrial, commercial or scientific equipment and containers and other similar rights.

If royalties’ income is subject to withholding tax, the withholding tax exhausts the tax liability only for individuals and for the specific type of income of the taxpayer.

Income from immovable property

The term “income from immovable property” means income, whether in cash or in kind, derived from the leasing or self-use or free grant of use of land and real estate. 

In particular, this income is derived from:

a) Leasing or subleasing or granting the use of land or real estate including buildings, structures and all kinds of their facilities and equipment.

b) Leasing or subleasing or granting the use of mines, quarries, forest and agricultural land, including meadows, arable land, pasture land, as well as any kind of structures or installations on or below the surface of the ground, such as fish farms, lakes, reservoirs, springs and wells.

c) Leasing or subleasing or granting the use of space for the placement of any kind of advertising signs.

d) Leasing or subleasing or granting the use of common areas in real estate.

Specific expenses are deductible from the income from immovable property under certain conditions, such as the rent paid in cases of subleasing, a one-off 5% for repair and maintenance expenses of the property if the leaser is an individual, etc.

Income from immovable property is taxed separately according to the following scale:

Income from immovable property (EUR)

Rate %

0-12.000

15%

12.001 – 35.000

35%

35.001-

45%

 
Income from Short-Term Rental Property (Sharing Economy)

From 1.1.2024 onwards, the income obtained, by natural persons, from the short-term rental of up to two (2) properties, [as defined in article 111 of Law 4446/2016], is considered as income from immovable property and is taxed with the above scale, provided that the properties are rented furnished without the provision of any service except the provision of bed linen. In the case that any other services are provided, this income is considered as business income. The income obtained from short-term rental by natural persons who rent out three (3) or more properties is considered as income from business activity.

Also, as income from business activity is considered the income obtained by legal persons or legal entities, from the short-term rental of immovable property [as defined in article 111 of Law 4446/2016] regardless of the number of properties rented out.

Tax Reduction for Building Upgrade Expenditure

Expenses incurred for the purchase of goods and the provision of services related to the energy, functional and aesthetic upgrading of buildings, which have not already been included or will not be included in a building upgrading program, reduce equally distributed over a period of five (5) years, the personal income tax, up to the corresponding tax for each tax year, with a maximum total expenditure limit of sixteen thousand (16,000) euros. The amount of expenses for the purchase of goods taken into account for tax reduction does not exceed one third (1/3) of the amount of expenses for the provision of services taken into account for tax reduction. For the above reduction of the tax it is required that the expenses can be proved with legal documents and that their payment is made by electronic means of payment or through a payment service provider.

1.4. Income from Capital Transfer Gains (Chapter F of the Income Tax Code)

Income from capital transfer gains is taxed at a rate of fifteen percent (15%). In particular, income from capital transfer gains arising for an employee or a partner or shareholder of a legal person or legal entity that is not a listed small business start-up or even a very small business, in the form of stock options, is taxed at a rate of five percent (5%) if specific conditions are met.

Transfer of immovable property

Any income derived from capital gains from the transfer of immovable property or an ideal share thereof or a beneficial interest in immovable property or an ideal share thereof or participations which derive more than 50% of their value directly or indirectly from immovable property and which do not constitute a business activity is subject to individual income tax. The income referred to in the preceding subparagraph shall also include the market value of the building erected on land owned by a third party at the expense of the lessee and which comes into the possession of the third party upon the expiry or termination of the lease.

Transfer of immovable property shall also be understood as the contribution of real estate for the purpose of covering or increasing the capital of a legal person or legal entity.

The taxation of income from capital gains on the transfer of immovable property has been suspended until 31/12/2022.

Transfer of Securities

Income from the transfer of securities means any income arising from capital gains from the transfer of the following securities, as well as from the transfer of an entire enterprise:

a) shares in a company not listed on a stock exchange,

b) shares and other securities listed on a stock exchange, provided that the transferor holds at least half a percent (0.5%) of the company’s share capital,

c) shares or units in personal companies,

d) government bonds and treasury bills or corporate bonds,

e) derivative financial products.

Goodwill is the difference between the purchase price paid by the taxpayer and the selling price received. Any costs directly related to the purchase or sale of the securities are included in the purchase and sale price.

Income earned by individuals who are tax residents of states with which Greece has concluded convention for the avoidance of double taxation and arising from capital gains on the transfer of securities in accordance with the previous paragraphs, is exempt from tax, provided that supporting documents proving their tax residence are submitted to the Tax Administration.

Stock Options – Free Share Allocation

Income arising for an employee or partner or shareholder from a legal person or legal entity in the form of stock options, as determined at the time the option is acquired and regardless of whether the employment relationship continues, constitutes capital gains income if the shares are transferred after the completion of twenty-four (24) months from the acquisition of the options and is subject to individual income tax.

Specifically for the above income derived by a legal person or legal entity that is not listed on the stock exchange, a newly established small business or a very small business, this is subject to a rate of five percent (5%), provided that the following conditions are met:

a) The above rights shall be acquired within five (5) years after the incorporation of the company.

b) The company has not been formed by merger and

c) The shares are transferred after the completion of thirty-six (36) months from the acquisition of the options.

Finally, income accruing to an employee or partner or shareholder in the form of shares granted by a legal person or legal entity in the context of free share allocation schemes, which require the achievement of specific objectives or the occurrence of a specific event in order for the shares to be allocated, constitutes capital gains income if the shares are transferred after their acquisition by the beneficiary of the scheme.

1.5. Expenses by Electronic Means of Payment

The taxpayer will have to incur each tax year a required amount of expenses by electronic means of payment amounting to thirty percent (30%) of his/her actual income derived from wages – pensions, business activity and immovable property and up to twenty thousand (20,000) euros of expenses. The calculation of actual income does not include the amount of the special solidarity contribution under Article 43A and the amount of alimony paid to the divorced spouse or partner and/or dependent child, if paid by electronic means of payment.

When the declared amount of expenses does not cover the above required amount of expenses, the resulting positive difference, multiplied by a rate of twenty-two percent (22%), adds to the scale tax.

Especially for the tax years 2022 to 2025, from the taxable income of an individual person from wages and pensions, business activity and immovable property, solely for the calculation of income tax, an amount equal to thirty percent (30%) of the costs of receiving services, for certain expenses of Groups 4 (Housing), 5 (Services), 7 (Transportation), 9 (Recreation, cultural activities), 10 (Education), 12 (Services) in per. d) of par.  6 made by electronic means of payment in accordance with per. a) of the aforementioned paragraph, is deducted on a pro rata basis. The deductible amount of income does not exceed the amount of five thousand (5.000) euros per year nor the actual income from wages and pensions, business activity and immovable property.

1.6. Special Solidarity Contribution

A special solidarity contribution is levied on income of more than twelve thousand (12.000) euros of individuals or of estate without a claiman. For the imposition of the contribution, the total income is taken into account, as it results from the aggregation of income from employment and pensions, from business activity, from capital, from capital transfer gains, taxable or exempt, real or presumed.

For the purpose of calculating the contribution, the income of severely disabled persons and compensation for termination of employment are not taken into account. In addition, long-term unemployed people and those receiving unemployment benefits are exempted from the obligation to pay the special contribution if they have no real income.

The special solidarity contribution is calculated using the following scale:

Income

Special Solidarity Contribution

0 – 12.000

0%

12.001 – 20.000

2,20%

20.001 – 30.000

5,00%

30.001 – 40.000

6,50%

40.001 – 65.000

7,50%

65.001 – 220.000

9,00%

>220.000

10,00%

For the tax year 2022, the income provided for in this article is exempt from the special solidarity contribution, with the exception of income from employment in the public sector and pensions.

The special solidarity contribution is abolished for all income under this article earned from 1 January 2023 onwards (Article 177 of Law 4972/2022).

1.7. Alternative way of calculating the minimum tax

The taxable income of each taxpayer is divided into real (declared) and presumed income, which is added (if required) to the declared income.

Real Income

Real income is the income earned by the taxpayer for the period for which the taxpayer is liable to file a tax return and is determined on the basis of actual data such as: remuneration certificates, income from the books of the business operated by the taxpayer, income from dividends, interest on deposits, royalties, income from immovable property (e.g. rental income from real estate), and any other income derived from real data.

Ideally, the real income should be the same as the declared income, i.e. the income declared by the taxpayer. For this reason, the legislator, in several provisions of the Income Tax Code, uses the term “real” and not “declared” income.

Presumed Income

Unlike real income, presumed income is derived from calculations made on the basis of other data, such as the living expenses of the taxpayer and his/her dependants, as following:

Objective expenditures and services:

  • primary and secondary dwellings,
  • private passenger cars,
  • private schools,
  • auxiliary staff,
  • private pleasure craft,
  • aircraft, helicopters and gliders,
  • swimming pools,
  • minimum annual objective expenditure of a taxpayer.

Expenditure on the acquisition of assets:

  • the purchase or leasing of cars, two-wheeled vehicles, etc,
  • the purchase or leasing of pleasure boats, other pleasure craft and aircraft,
  • purchase of businesses, shares and securities,
  • purchase or timeshare or leasing of real estate or construction of buildings, etc,
  • granting loans to anyone,
  • donations or parental benefits or grants of sums of money,
  • interest amortisation of loans.

According to the provisions of article 30 of Law 4172/2013, a taxpayer subject to individual income tax is subject to alternative minimum taxation when his/her presumed income is higher than his/her total income. In this case, the difference between presumed and real income is added to the taxable income and this is taxed accordingly by adding it either to any income from wages and pensions, or to income from business activity, or to income from agricultural business activity.

Τhe profits acquired annually by legal persons and legal entities are subject to income taxation of legal persons and legal entities.

Tax Rate

a) Profits from business activity acquired by legal persons and legal entities, except for the following cases b) and c), are taxed at a rate of 24%. For profits acquired in tax year 2021 and onwards, the rate is reduced to 22% (by virtue of article 120 of Law 4799/2021).

b) Credit institutions, if they have joined the regime of voluntary conversion of deferred tax claims on temporary differences into final and settled claims against the Greek State (article 27A), are taxed at a rate of 29%.

c) The profits from business activity acquired by agricultural cooperatives of Law 4384/2016 and legal entities recognized by the Ministry of Rural Development and Food as Groups and Producer Organizations of Article 27 of Regulation (EU) 1305/2013 and included in the Register of Producer Organizations and Groups under Article 7 paragraph 1 of Decision 397/18235/2017 (B’ 601) are taxed at a rate of 10%.

Exempt Legal Entities

The following legal entities are exempted from the income tax:

a) General government entities with the exception of income derived from capital and capital transfer gains. These entities do not include capital companies, except those in which the State or a legal entity governed by public law has a one hundred percent (100%) shareholding.

b) The Bank of Greece.

c) Portfolio investment companies and undertakings for collective investment in transferable securities established in Greece or in another member state of the European Union or the European Economic Area.

d) International organisations, provided that the exemption from tax is provided for under an international convention ratified in the country or subject to reciprocity.

e) The Fund for the Exploitation of Private Property of the State S.A, in accordance with the legislation governing it.

f) School committees and school boards of minority primary and secondary schools.

Determination of the profits of Legal Persons and Legal Entities

The profits of legal entities are determined by deducting from their total income the expenses considered deductible under the Income Tax Code.

If the result is a loss, it is carried forward to be offset against business profits successively in the next five (5) tax years.

In the case of capitalisation or distribution of profits on which no income tax has been paid by legal persons or legal entities, the amount distributed or capitalised shall in any case be taxed as business profits, regardless of the existence of tax losses.

Intra-group dividends of legal entities are exempt from tax if they fall under the provisions of Directive 2011/96/EU.

Intra-group Transactions

For intra-group transactions of legal persons and legal entities with their related parties, the Arm’s Length Principle should be applied for the verification of compliance with which the OECD guidelines apply.

Provisions Against Tax Evasion and Tax Avoidance

The provisions of Directive ATAD 2016/EU/1164 have been incorporated into Greek Tax Law providing for the following:

  • Interest limitation rule
  • Exit taxation
  • General Anti-abuse ule Controlled Foreign Company rule
  • Hybrid mismatches

Greek legislation also provides for the annual publication of a list of non-cooperative jurisdictions in the tax area and jurisdictions with a preferential tax regime. For transactions carried out with tax residents of such jurisdictions and in order to deduct such expenses from income, the taxpayer must prove that such expenses relate to real and ordinary transactions and do not result in the transfer of profits or income or funds for the purpose of tax avoidance or tax evasion.

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