Tax treatment of director’s fees paid by a UK company to Greek tax residents
In respect to the taxation on Management Board Member’s fees and dividends provided by a corporate body or legal person or legal entity with registered offices in the UK, the following apply:
According to the new Income Tax Return Code (Law 4172/2013, from now on “ITRC”), the taxpayer that is a tax resident of Greece, is under the obligation to pay taxes based on his global income.
A. Dividends taxation
Income from dividends is considered a capital income (article 35 of ITRC) and is being taxed at a rate of 10% (article 40 par. 1 of ITRC).
When a Greek national taxable natural person obtains income from dividends in a foreign country (regardless of whether this income is imported in Greece or not), it is mandatory that such a natural person includes such an income in its annual income tax return together with the rest of its earnings. Subsequently, the said income will be taxed as a capital income at a rate of 10%and the consequential tax liability exhaustion (Circular no 1042/2015).
Β. Management Board Member’s wages taxation
The following cases apply:
a) statutory or General Assembly approved fees of Directors or Members of Management Boards constitute income from waged labour and pensions and are being taxed on the basis of the following taxation rates scale (article 12 par. 2, article 15 par. 1 ITRC):
| Taxable Income (€) | Tax Rate (%) |
| < 25.000 | 22% |
| 25.000,01 to 42.000 | 32% |
| > 42.000 | 42% |
b) fees deriving from the company’s remaining net profits are considered “dividends” and are being taxed according to the aforementioned procedure, which is to say they are taxed at a rate of 10% and the consequential tax liability exhaustion.
c) fees for the provision of services, beyond the status of Management Board Membership (e.g. services provided by mechanics, accountants, legal services etc), to the company or the legal entity the Directors or Management Board Members obtain income from, regardless of the existence of a contract or the absence of one, are considered an enterprise activity income (Circular 1097/2015) and are being taxed according to the following taxation rates scale:
| Taxable Income (€) | Tax Rate (%) |
| ≤ 50.000 | 26% |
| > 50.000 | 33% |
C. Double Taxation Convention between Greece and the UK
As provided in the Double Taxation Convention between Greece and the UK, if the income is taxable in both countries, an exemption from the double taxation is granted, which is to say that the UK tax regarding income from sources in the UK will be deducted from the Greek tax that would relate to such income.
D. Conclusion
As deduced from the above, income from dividends and fees of Management Board Members, residents of Greece, obtained in the UK is subject to taxation in Greece.
However, if the taxation imposed in the UK differs from the equivalent Greek taxation for the same income, the following apply:
a) if the tax that has been paid in the UK equals or exceeds the one prescribed by the Greek Law for the same income, there is no tax obligation in Greece.
b) if the tax that has been paid in the UK is less than the Greek equivalent, the natural person has to pay the excess in Greece.
c) if the tax that has been paid in the UK exceeds the Greek one that corresponds to the same income in Greece, the excess that has been paid abroad will not be refunded to the natural person.
In any case, the natural person has to provide the competent Greek authorities with the necessary documentation by the competent UK tax authority which will indicate the tax that has been paid abroad.