Greece tax system for expats

Parent Category: ROOT Published: Thursday, 03 September 2020 Print
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Expat's guide on Greece tax system 

Greece is one of the most popular vacation destinations for tourists and expats in Europe. Why? This country is a water world on its own. It has over a dozen ski resorts, beautiful Islands, exciting nightlife, and historic centers.

Greece is an amazing country for expats planning on starting a new life in Europe.

Greece has one of the most favorable systems for foreigners. The taxation system in the country is constantly changing to keep up to the ever-evolving austerity measures. Just like all Grecian, expats residing here are liable for tariffs on their Greek sources of income from sources.

In this post, we’ll be guiding you on all you need to know before filing your tax as a foreigner living in Greece. We will be touching key areas of the Greek taxation system, policies, conditions, and types of levies for expats. 

 

Expatriate taxation in Greece

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Before you move to Greece, you need to look at the financial impact of your expatriate fee on your pocket. Foreigners residing in Greece will pay the due levy on all monetary transactions made. 

Foreigners residing in the Hellenic Republic are considered taxable residents if they spend over 183 days in a year in the state or their main home is located in Greece. As an expat residing in the Balkan country, you should hire a tax representative and file tax returns with the non-Greek resident tax office if you have a Greek income source.

Non-residents in this country are not entitled to any deduction or/and allowances enjoyed by residents. Only EU nationals can earn up to 90% of their income. 

Double taxation treaties also apply to income earned by expats. To be in line with this policy, you must be a permanent resident of a treaty country, must not reside in Greece for more than 183 days, and employed by an individual or firm of the treaty country to render their services. 

There are treaties, policies, and conditions that apply to nationals of other nations. Greece has double-taxation treaties over 30 countries including the Republic of Korea, Luxembourg, Argentina, Germany, Hungary, Poland, Romania, the Slovak Republic, Sweden, Switzerland, the United Kingdom, Canada, Austria, Belgium, Denmark, Egypt, Finland, Ireland, Italy, Cyprus, the Czech Republic, France, Iceland, the Netherlands, Norway, and the United States.

You should find out what treaty or agreement your home country has with Greece before filing a tax application.

 

Conditions

When you are charged only on your Greek source income, you do not need to notify the Greek tax authorities of your non-Greek residence status. Before you are charged as a foreigner in this country, you must meet the following requirements to pay levies:

  • Be a Greek permanent resident.
  • Have spent over 183 days in any calendar year in Greece.
  • Be employed, do business, or perform a paid professional service in the country.
  • Have an active investment
  • Have an annual income from your salaries, pensions, self-employment endeavors, or alimony from a spouse worth over €3,000.

 

Types of taxes

The Greece taxation system is one of the most advanced systems in Europe. Just like most developed nations, taxes can be direct or indirect. In general, individual taxpayers are liable to income, social security, capital (also known as inheritance, gifts inter vivos, or lottery gains), or value-added taxes (VAT).

 

Income tax

Income taxation is progressive and payable by all individuals earning income in Greece. Your income from all sources is summed up and a deduction is made depending on how much you earn.

Monthly income

Levy

Below €20,000

22%

€20,000 - €30,000

29%

€30,000 – €40,000

37%

Above €40,000

45%

 

When completing your income tax payment, you can avoid double-taxation with the FOREIGN TAX CREDIT [Form 1116] or the FOREIGN EARNED INCOME EXCLUSION (Form 2555).

 

Corporate Tax

The Greek tax authorities collect tariffs on issues covered in corporate laws and regulations. All companies [foreign or local] incorporated under Greek law, registered or managed in the Balkan nation at any time of a tax year is liable to corporate taxes in Greece.

Like income tax, all local corporations are charged on their worldwide income. While non-resident corporations are levied only on their Greek-source income. These charges can apply to capital gain, anti-avoidance, BEPS, overseas profits, real estate, and the digital economy. 

The rate for capital gains ranges from 0% to 20%, depending on the type of gain. VATs may also be imposed on expats for sale of goods, provision of services, or building supplies. The current VAT rate is 23%. Some non-residents taxpayers may qualify for 13% or 6% depending on their nationality. 

Foreign taxpayers need to know that the penalties for failing to file tax are harsher than the penalties gotten for failure to pay tax. Whenever you travel to Greece, you must file your tax requirements as soon as you can.

 

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