Greece is a country located in Southeast Europe with a rich history and cultural heritage. The country has a taxation system that is governed by the Ministry of Finance. In this article, we will discuss how the taxation system works in Greece, double taxation agreements, the main taxes expats need to be aware of, special tax breaks that could apply to expats, how and when to file a tax return as an expat, and tax exit procedures for anyone leaving Greece to move abroad.
How the taxation system works in Greece
The taxation system in Greece is a progressive system, meaning that the more you earn, the higher your tax rate will be. The tax year in Greece runs from January 1st to December 31st, and taxes must be filed by June 30th of the following year.
There are several taxes that individuals and businesses in Greece are required to pay. These include income tax, value-added tax (VAT), property tax, and social security contributions.
Double taxation agreements
Greece has signed double taxation agreements with several countries, including the United States, Canada, and the United Kingdom. These agreements are designed to prevent individuals and companies from being taxed twice on the same income.
If you are an expat living in Greece and your home country has signed a double taxation agreement with Greece, you may be able to avoid being taxed twice on your income. However, it is important to check the terms of the specific agreement as they can vary between countries.
Main taxes expats need to be aware of in Greece
All residents in Greece are required to pay income tax on their worldwide income. The income tax rate varies depending on income levels and ranges from 9% to 44%.
Value-added tax (VAT)
The VAT rate in Greece is currently 24%. This tax is applied to most goods and services, including imports.
Property owners in Greece are required to pay property tax on their real estate holdings. The tax rate varies depending on the value of the property.
Social security contributions
All employees in Greece are required to make social security contributions. The employer and employee each contribute to social security, with the total contribution being 26.95% of the employee’s salary.
Special tax breaks that could apply to expats
There are several special tax breaks that could apply to expats living in Greece. These include:
Tax relief for foreign income
Expats who earn income from foreign sources may be eligible for tax relief in Greece.
Expats may be eligible for tax deductions for certain expenses, including moving expenses and travel expenses related to work.
How and when to file a tax return in Greece as an expat
If you are an expat living in Greece, you are required to file a tax return if you meet certain criteria. If you are a resident in Greece, you are required to file a tax return if your income exceeds €8,636 per year. If you are a non-resident and earn income within Greece, you must also file a tax return.
The tax return must be filed annually by June 30th of the following year. The Greek tax authority provides an online platform where you can file your tax return, and it is recommended that you seek the assistance of a tax professional to ensure that you file correctly and take advantage of any applicable tax breaks.
Tax exit procedures for anyone leaving Greece to move abroad
If you are leaving Greece to move abroad, you must complete a tax exit procedure with the Greek tax authority. This procedure involves filing a tax return for the year in which you leave, paying any outstanding taxes, and obtaining a tax clearance certificate.
The tax clearance certificate is required to obtain a residence permit or visa in another country. Failure to complete the tax exit procedure can result in a fine and other legal consequences.
Greece has a progressive taxation system, and individuals and businesses are required to pay several taxes, including income tax, value-added tax, property tax, and social security contributions. Expats living in Greece may be eligible for special tax breaks, and it is important to file a tax return correctly and complete the tax exit procedure if leaving the country. It is recommended that you seek the assistance of a tax professional to ensure that you comply with all tax regulations in Greece.