GreeceTax Obligations Detailed

In Greece, employers navigate various tax obligations related to payroll, social security, and income tax, impacting both their businesses and their employees' earnings.

Payroll and Income Tax

• Income Tax: Employee income is taxed progressively, ranging from 9% (up to €10,000) to 44% (above €40,000). A solidarity contribution applies to income exceeding €12,000, with rates from 2.2% to 10%. As of 2022, this contribution has been temporarily suspended for private sector employees, and its application for the 2025 tax year is not yet available.
• Withholding Tax: Employers operate under a Pay-As-You-Earn (PAYE) system, deducting income tax directly from employee salaries. Withholding tax returns must be submitted by the end of the second month following the payment date, regardless of the tax amount due.
• Tax Year and Filing: The tax year aligns with the calendar year. Corporate tax returns for the fiscal year ending December 31st must be filed between March 15th and July 15th of the following year, with payments made in eight equal installments.

Social Security

• Contributions: Both employers and employees contribute to social security. As of today, February 5th, 2025, information regarding updated employer and employee contribution rates for the entire year is not publicly available yet. However, anticipated rates as of January 1st, 2025, would be 21.79% for employers and 13.37% for employees.
• Contribution Base: Updated data regarding the social security contribution base as of today, February 5th, 2025 is not yet accessible. It is anticipated to be released at the beginning of 2025. For 2024, however, the contribution base is set at EUR 7,373.53 monthly.
• Payment and Reporting: Similar to withholding tax, social security contributions are submitted monthly, by the last working day of the second month following the payroll period.

Additional Employer Obligations

• Annual Income Certificate: Employers must provide employees with an annual income certificate by the end of February, detailing the previous year's earnings.
• Annual Leave Report: Employers have the added responsibility of providing an annual leave report to the tax authorities by the end of January.
• Minimum Wage: Greece has a national minimum wage, which must be adhered to. Non-compliance can lead to penalties from the authorities. For 2025, minimum wage information specific to the new year will be published by the Greek Ministry of Labour and Social Affairs.

It's important to note that this information is current as of today, February 5th, 2025, and may be subject to change with new announcements.

In Greece, employee tax deductions encompass income tax, social security contributions, and other levies, impacting net income. Understanding these deductions is crucial for both employers and employees.

Income Tax

• Tax Rates: Income tax rates are progressive, ranging from 9% to 44%. The top rate applies to annual income exceeding €40,000.
• Tax Allowances: A personal allowance of €777 is available for employees earning less than €12,000, decreasing progressively for higher incomes. Additional allowances exist for dependent children.
• Tax Residency: Tax residents are taxed on worldwide income, while non-residents are taxed only on Greek-sourced income. Residency is determined by physical presence (over 183 days in a 12-month period) or center of vital interests. New tax residents meeting specific criteria may qualify for a special regime, taxing only 50% of Greek-sourced income for up to seven years.
• Tax Filing: The tax year is the calendar year. Tax returns are due by July 15th of the following year, with potential discounts for early filing and full payment by July 31st (4% discount for filing between March 15th and April 30th, 3% for filing between May 1st and June 15th, and 2% for filing between June 16th and July 15th). Taxes are payable in eight equal monthly installments, starting at the end of July.

Social Security Contributions

• Employee Contributions: Employees contribute a percentage of their salary towards social security, covering areas such as healthcare, pensions, and unemployment. The total contribution is 13.87% as of January 1, 2025. The employer portion is 22.29% plus a fixed annual fee of €20 per employee, also as of January 1st, 2025.
• Deductibility: Social security contributions are deductible from taxable income.

Other Deductions and Taxes

• Special Solidarity Contribution: Income exceeding €12,000 annually was subject to a special solidarity contribution, although it has been temporarily suspended for certain years.
• Business Levy (Abolished): The business levy, applicable to freelancers and self-employed individuals, was abolished in 2025 for natural persons.
• Imputed Income (Freelancers): Freelancers taxed based on imputed income will see adjustments to minimum taxable income, calculation methods, and turnover thresholds.

General Information

• Tax Incentives: Various tax incentives exist, such as deductions for donations, specific expenses related to medical expenses, children, and a tax reduction for expenses paid electronically. New incentives are available for angel investors in start-ups.
• Tax Year and Filing: The tax year aligns with the calendar year. Several changes to the tax filing procedures have been implemented in 2025, aiming to streamline processes and improve compliance.
• Employer Reporting: Employers must withhold taxes and social security from employee salaries and remit them to the relevant authorities. Various reporting requirements exist, such as providing annual income certificates to employees by the end of February and submitting payroll reports by the last working day of the second month following the payroll period.

It is important to note that this information is current as of February 5, 2025, and may be subject to change. Consulting with a tax advisor is recommended for personalized guidance.

In Greece, all businesses conducting economic activities must register for Value Added Tax (VAT), regardless of their annual turnover. There's no minimum threshold for registration.

VAT Rates

• Standard Rate: 24% (applicable to most goods and services).
• Reduced Rates: 13% (e.g. certain food items, hotel accommodations, passenger transport, restaurant services); 6% (e.g. pharmaceuticals, books, newspapers, utilities like gas and electricity).
• Super-Reduced Rate: 4% (This rate exists, but specific examples were not available in the sources).
• Zero-Rated: Exports, intra-community supplies of goods and some specific supplies (e.g. COVID-19 vaccines).
• Specific Regional Rates: Aegean islands (Leros, Chios, Kos, Samos, and Lesvos) have a 30% reduction on the standard and reduced rates (17%, 9%, and 4% respectively), under certain conditions.

Registration

• Mandatory: All businesses engaged in “economic activity”, including residents and non-residents, must register for VAT. There is no threshold. This applies to tangible and intangible goods and services, as well as companies involved in production, mining, agriculture, and various service sectors.
• Distance Selling Threshold: For EU VAT-registered companies selling goods online to consumers in Greece, the threshold for VAT registration is €35,000 per annum.
• Procedure: Registration is done through the tax authorities, where a unique tax registration number is obtained. Additional documentation may be required for specific cases (e.g. EU businesses may require specific forms submitted to the relevant tax office).

Filing and Payment

• Frequency: Typically quarterly. Monthly filing is required if the annual turnover exceeds €1,500,000.
• Method: Electronically via the TAXISnet platform.
• Deadline: Last working day of the month following the reporting quarter. Payments are due on the same date, with some options for two-installment payments.
• Annual Return: No longer required since 2014.

VAT Exemptions

• Specific Goods and Services: Exempt goods and services include medical care and related goods and services, some non-commercial activities by national radio and television, and specific goods for medical purposes (e.g., human organs, blood, milk). Real estate leases are generally exempt, however, commercial leases for shopping centers and logistics centers can be subject to VAT if the lessor opts for taxation under VAT.
• New Buildings: VAT on new building construction is suspended until December 31, 2025.
• Short-term Rentals: Legal entities and individuals renting more than two properties for short-term accommodation (e.g., Airbnb) are subject to VAT at 24% as of January 1, 2024.

Penalties

• Late Filing: Fines ranging from €100 to €500 per declaration.
• Misdeclarations: A fine of 50% of any VAT due.
• Late Payment: 0.73% interest per month on the unpaid VAT amount.

This information is current as of February 5, 2025, and is subject to change due to potential updates in tax legislation. For specific situations or further clarifications, it's recommended to consult with a tax professional.

Greece offers various tax incentives for both individuals and businesses. As of today, February 5, 2025, these are some of the key incentives. Keep in mind that tax laws are subject to change.

Incentives for Individuals

• New Tax Residents (Article 5A): Individuals transferring their tax residence to Greece who haven't been Greek tax residents for seven of the past eight years can opt for alternative taxation of foreign-sourced income. This requires a minimum investment of €500,000 in Greek real estate, companies, or securities within three years of the application.
• Foreign Pensioners (Article 5B): Foreign pensioners transferring their tax residence to Greece can benefit from alternative taxation of their foreign-sourced income. They must not have been Greek tax residents for five of the six years preceding the transfer and the transfer must be from a country with a tax cooperation agreement with Greece. Application is due by March 31st of the tax year.
• Employment/Business Activity (Article 5C): Individuals transferring their tax residence and engaging in employment or business activity in Greece, and who haven't been Greek tax residents for five of the past six years, may be eligible for a 50% exemption on their Greek-sourced income. This applies to new employment positions only. Application is due by July 31st of the year employment begins.
• Angel Investors: Individuals investing in registered Greek startups or Closed Ended Funds (AKES) can deduct up to 50% of their investment (up to €900,000 total, and maximum €300,000 per startup/fund across three) from their taxable income.

Incentives for Businesses

• Research & Development (R&D): Expenses related to scientific and technological research are 150% deductible. This increases to 215% for collaborations with registered startups, recognized research centers, unaffiliated universities, or depreciating research equipment (for SMEs under specific conditions).
• Job Enhancement: Employers' contributions for new hires can be up to 14 times the minimum monthly wage for unmarried employees over 25, with a 50% increased tax deductibility under certain circumstances.
• Corporate Transformations: A new framework exists for tax incentives related to corporate transformations (mergers, acquisitions, spin-offs, etc.). Further details are available in Law 5162/2024.
• Intra-group transactions: Tax exemption is available for intra-group dividends and capital gains derived from shares of non-EU legal entities starting from the 2025 tax year.

Other Tax Provisions

• VAT Exemption on New Buildings: The VAT exemption on new building constructions has been extended until December 31, 2026.
• Capital Gains Tax Suspension: Capital gains tax on the transfer of immovable property continues to be suspended until December 31, 2026.
• Stamp Duty Repeal: Stamp duty has been repealed as of December 1, 2024.

Tax Relief for Audiovisual Productions

• A 30% tax relief on eligible expenses is available for audiovisual productions in Greece.

This information is for general guidance only and does not constitute professional tax advice. It's important to consult with a tax advisor for specific situations.