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Taxation of individuals

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Taxation of individuals

Τhe main taxes imposed on individuals

The main types of taxation on individuals are income and capital taxes. Of course, there are also many other forms of indirect taxes, mainly on transactions and consumption. Income taxation is the most important tax that affects individuals. The two main categories of capital tax are tax on inheritance/gifts inter vivos/lottery gains and tax on the transfer of real property. In the present chapter we deal only with 1) income tax 2) tax on inheritance/gifts inter vivos/lottery gains;

A. Income tax on individuals 

 1) Who is subject to income tax in Greece?

Subject to income tax in Greece is a) any individual who has his tax residence in Greece, on his worldwide income; with the exception of any foreign employee of an office established in Greece under the Law 89/1967, who is subject to income tax in Greece only on his income produced in Greece b) any individual who has not his tax residence in Greece, on his income produced in Greece.

An individual is a tax resident in Greece a) if his permanent or principal residence or usual place of domicile or the centre of living interests, i.e. his personal or financial or social connections are in Greece b) if he is a consular or diplomatic or public official of similar status or a public servant having the Greek nationality and serving abroad.

Any individual being in Greece for above 183 days, including short intervals of staying abroad, is deemed to be a tax resident in Greece from the first day being in Greece. By way of exception, individuals being in Greece exclusively for tourist, health, cure or similar private purposes a period not exceeding 365 days, including short intervals of staying abroad.

2) Which income is subject to taxation in Greece?

Subject to tax is the income remaining after the deduction of the expenses, which are deductible according to the Greek Income Tax Code, from the gross income.

The categories of gross income provided in the Greek Income Tax Code are the following:

a) Income from employment and pensions;

b) Income from a business activity;

c) Income from capital;d) Income from capital gains;

The term “income from employment and pensions” includes any income from employment and pensions either in cash or in kind.

The term “income from a business activity” includes the profit from a business or an agriculture activity remaining after the deduction of the business expenses, the depreciation and the provision of doubtful depts. Also, any increase in assets derived from an illegal or an unjustified or an unknown source or cause is deemed to be profit from a business activity.

The term “income from capital” includes dividends, interests, royalties and income from real estate property either in cash or in kind.

The term “income from capital gains” includes income derived from a) The transfer of real estate or a right there on; b) The transfer of securities (i.e. listed or non-listed shares, interests in a partnership, government bonds and treasury bills or corporate bonds, financial derivatives) or a business entity as a whole, including securities contribution to a legal person or entity either for covering its initial capital or its capital increase.

3) When is tax imposed?

Tax is imposed on the income produced during the previous tax year. The tax year is identical to the calendar year.
Income is deemed to be earned at the time when the beneficiary is entitled to collection. By way of exception, in case of unpaid, but accrued employment income which is late collected by the beneficiary, the income is deemed to be earned at the time of collection provided that this is distinctively indicated in the annual pay certificate.

4) What are the currently applicable tax rates?

a) The income from employment and pensions is taxed according to the following scale:

Taxable income (€) Tax rate (%)
≤ 25.000 22%
25.000,01- 42.000 32%
> 42.000 42%


b) The income from business activity is taxed according to the following scale:

Taxable income (€) Tax rate (%)
≤ 50.000 26%
> 50.000 33%


The tax rate is 13% for individuals firstly registering their business activity for tax purposes on January 1st, 2013 or thereafter and for the first 3 years subsequent thereto provided that their annual income from a business activity does not exceed € 10.000.

By way of exception the profits derived from agricultural activity are taxed at 13%.

Any lump sum compensation paid by a body and on any grounds regarding to termination of an employment relationship or any other similar relationship between the body and the compensation beneficiary is taxed separately under the following special tax scale:

Taxable compensation (€) Tax rate (%)
≤ 60.000 0%
60.000,01-100.000 10%
100.000,01-150.000 20%
> 150.000 30%


c) The income from real estate property is taxed according to the following scale:

Taxable income (€) Tax rate (%)
≤ 12.000 11%
> 12.000 33%


d) The income derived from gains capital is taxed at 15%.
5) What are the most important tax benefits-exemptions?

a) The following amounts exclude from the taxable employment income:

– Expenses for hotels and meals and the daily allowance paid by employees for their business activity;

– Travel expenses paid by employees in the course of their employment and as this proved by the legal documents;

– Foreign benefits provided to Foreign Ministry or other public politic services officials;

– Social security taxes withheld by employers;- Meal vouchers up to € 6 per working day;

– Provisions up to € 27 per a year;- Premiums paid under a group personal pension plan (GPPP); and

– Premiums paid by employers for medical and hospital care or for life or disability insurance for their personnel up to € 1.500 annually per employee.

b) The total amount of tax is reduced by € 2.100 if the taxable income does not exceed €21.000. If the total amount of tax is below €2.100, the amount of the reduction is reduced by the amount of the tax attributable. The amount of reduction is reduced by €100 for each €1.000 of taxable income beyond €21.000. If the taxable income exceeds €42.000, no reduction is granted.

c) The total amount of tax is further reduced by 10% (capped at € 3.000) in case of medical and hospital care expenses provided that they exceed 5% of the taxable income and by 10% in case of donations (capped at 5% of the taxable income) to certain entities, specified by the Ministry of Finance, provided that they exceed €100 annually.

d) The foreign income tax is credited against the income tax attributable in Greece (capped at the amount of the latter).

e) The loss from business activity or capital gains can be carried forward the next 5 years and can be offset with business profits or future capital gains respectively through these years.

f) The income from the transfer of securities (capital gains) earned by individuals, residents in a country with which Greece has concluded a Double Tax Convention, are exempted from income tax in Greece provided that the individuals submit to the Greek tax authority any documents proving their tax residence status.

g) The Capital gains from the transfer of real estate is reduced up to €25.000, if the individual had kept such real estate within a period of 5 years after the acquisition and the tax imposed to the remaining amount of capital gains.

6) Taxation for income which is deemed according to objective criteria.

The Greek tax system has adopted a method of calculating the tax obligation according to certain objective criteria (“deemed income”). If, after application of those objective criteria, the deemed income of the taxpayer is higher than the declared income, the excess amount is taxed as employment income if the taxpayer earns, exclusively or mostly, employment income; otherwise, the excess amount is taxed as business income, whereby however, in calculating the deemed business income, loss of the same tax year is not deductible and loss from previous tax years may not be carried forward.

Deemed income of a taxpayer and his dependents is calculated after taking into account thefollowing objective criteria:

a) the surface of the main residence of the taxpayer in combination with its tax value.

b) the surface of the secondary residence(s) of the taxpayer.

c) the engine capacity of the taxpayer’s car(s) (i.e. 1.200, 1.400 cc etc.), either owned or used,  in combination with the year of the car’s production.

d) Salary for house maids and other staff.

e) Fees for private schools for the taxpayer’s children

f) Leisure boats ,either owned or used, in combination with the year of their length

g) Aircrafts, either owned or used, in combination with their engine power (where applicable)

h) The surface of swimming pools

i) The minimum annual living cost set at € 3.000 for singles and € 5.000 for spouses by law.

The purchase of cars, motorcycles, leisure boats, aircrafts and other assets with a value exceeding € 10.000, the purchase or establishment or capital increase of any enterprise or the purchase of shares and securities in general, the purchase or leasing of real estate or the construction of buildings or swimming pools, loans or donations granted to anyone, or parental grants or sponsorships and the payoffs of any loans and credits are also calculated in determining the deemed income.

7) The obligation to file a tax return 

The obligation to file a tax return is linked to any individual being subject to income tax in Greece as per above (see under number 1). The husband has an obligation to file a common tax return in which is also declared the income of his wife. Any income losses accrued to one spouse may not be offset against income earned by the other spouse.

If the taxpayer identifies that the filed tax return contains an error or omission, he is required to file an amending tax return. The amending tax return may be filed at any time before a tax audit has been officially ordered or the tax authority’s right there to have been statute-barred; however, tax penalties for late filing may be imposed. By way of exception, if the amending tax return is filed within the deadline for filing the initial one, it is not deemed to be filed late, but it is treated as an initial tax return, and both returns are deemed to be timely filed. If a taxpayer has doubts as to the content of an item of the tax return, he may express a reservation, which must be detailed and specific. If the tax authority fails to respond within 90 days following the date of filing of the tax return, the reservation is deemed to be rejected. A reservation may also refer to the legal qualification of a taxable asset and the application of another tax law, another category or a reduced tax rate or to any applicable deductions or exemptions. The reservation does not suspend the collection of the tax due.

Tax returns may be filled electronically. Upon electronic submission the documentation is not submitted to the system, but should be available for inspection by the tax auditors at any time. Permanent residents in Greece who re-domicile abroad and foreigners, who gain income taxable in Greece, before their departure, must file a tax return and pay the relevant tax. The director of the competent tax office may at his discretion request a guarantee for the amount of tax to be paid by the individual who leaves the country as above. The individual in question may, upon approval of the tax auditor, appoint an individual who is a permanent resident in Greece as his representative and guarantor for the fulfilment of his tax obligations.

8) Clearance of the tax return – tax audit

The tax is calculated based on the data of the tax return and is assessed according to the provisions of the Tax Procedure Code after the deduction of any taxes withheld, any tax advances and any taxes paid abroad.

The tax is cleared by the electronic system upon submission. After the clearance is made, the tax office issues a tax statement, which can be a credit or a debit note to the taxpayer and in some cases “zero”. In case of a tax credit the excess amount is refunded.

The tax authority is entitled to verify and audit the taxpayer’s complies with his tax obligations and is accurately reporting his income to approve that the tax due has been duly calculated in accordance with the procedures provided for by the Tax Procedure Code. However, by way of exception a comprehensive tax audit may still be conducted without prior notice following an act of the Secretary General of the Ministry of Finance in cases of evidences of tax avoidance. Any other field audit may in any case be conducted even without prior notice.

The tax authority notifies the taxpayer of the results of the tax audit. The taxpayer may ask to submit supporting documents and data within 20 days upon notification of the written notice. If the taxpayer fails to meet the 20-day deadline, upon expiration, the tax authority issue the final corrective tax assessment act along with an audit report, which must thoroughly substantiate the tax assessment act.

9) Withholding of tax

Any individual, who is a tax resident in Greece and has a business activity and performs certain payments, is subject to a withholding tax obligation.

The payments which are subject to withholding tax are the following:

a) Dividends;

b) Interests;

c) Royalties;

d) Fees for technical services, management or consulting fees or other fees for similar services, either they have been supplied in Greece or not, if the recipient of the fee is an individual;

e) Benefit paid as a lump sum or on a regular basis under a group personal pension plan (GPPP);

f) Capital gains from the transfer of real estate property.

The following table provides an overview of the Withholding tax rates:

Payments Withholding tax rates (%)
Dividends 10%
Interests* 15%
Royalties & other payments 20%
Fees for technical services,

management or consulting fees or

other fees for similar services *

Benefit paid on a regular basis under GPPP 15%
Benefit paid as a lump sum under GPPP*** 10%** (≤ € 40.000)
Capital gains from the transfer of real estate property 20%** (> € 40.000)

* Interests on bank loans, including default interest and interests on interbank deposits are exempted.

** Fees paid to contractors for any technical project or tenants of public or municipal annuities are subject to 3% on the value of the project or the rent.

*** The rates Increased by 50% for payments in case of early redemption.

If the beneficiary is an individual, the payment of the withholding tax exhausts his tax liability.

The tax withheld must be paid no later than the end of the 2nd month of the date of the payment.

B. Tax on inheritance/gifts inter vivos/lottery gains 

According to article 1 of Law 2961/2001 (The Code on taxation of inheritance, gifts inter vivos and lottery gains), tax is imposed to any asset acquired by inheritance, gift inter vivos and winnings in lotteries, whether acquired by an individual or a corporate entity.

1) Inheritance tax

The assets which are subject to inheritance tax are the following:

a) Property of any kind situated in Greece and owned by a Greek national or foreigner.

b) Tangible or intangible movable property situated abroad and owned by a Greek national or a foreigner who was resident in Greece.

Liable to pay the inheritance tax is the recipient of the assets (beneficiary) and in case where there is more than one, the obligation is divided by analogy. The tax obligation arises upon death of the testator. However, there are various cases where the tax obligation  arises at a later point (e.g. in cases where the inheritance is subject to a condition or the succession is being disputed in a court of law or the estate is denounced by the successors or where an administrator is appointed to administer the estate etc.). The tax obligation may be postponed also by a decision of the director of the relevant tax office following a reasoned application of the taxpayer.

The Code provides different ways of calculation of the taxable value depending on the type of asset.

– For real estate, the evaluation is made according to the objective method which applies to taxation on real property transfer.

– For stocks and shares, the value which is taken into account is the value of the asset one (1) day before the death of the testator.

– Shares and parts in non-listed companies are valued according to a special method, which is used for the evaluation of such companies, which method takes into account the profits, turnover and other financial data of the past five (5) years.

– Furniture is valued at 1/30th of the value of the real estate where they are located; both the tax authority and the taxpayer have the right to challenge the value.

– Sums that remain in joint bank accounts and the value of items that are placed in safes are split equally between the beneficiaries of the account/safe; the tax authority and the beneficiaries may prove a different way to split the value between the beneficiaries. The beneficiaries of an estate may avoid the payment of tax by transferring the assets to the State. – Debts and charges to the estate as well as certain expenses (e.g. funeral expenses) are deductible from the value of the estate.

The tax-payers are classified into the following categories depending on their proximity with the testator:
Category A includes:

a) the spouse

b) the partner who has a contract for co-habitation according to the provisions of law 3719/2008, provided that the partnership was in existence at the time of death and it lasted at least 2 years;

c) the children;

d) the grandchildren;

e) the parents;

Category B includes:

a) the great-grandchildren et seq.;

b) the grand-parents and great-grand parents;

c) the voluntarily or judicially recognized children as against the parents of the father who recognized them;

d) the children of a recognized child as against the father who recognized them and his parents;

e) the brothers and sisters;

f) the collateral relatives of third degree ;

g) stepfathers and stepmothers;

h) children of the spouse from a previous marriage ;

i) brothers-sisters-fathers and mothers in law.

Catedory C includes all the rest of the relatives and aliens.

Tax is calculated according to the following table:


150.000 150.000
150.000 1 1.500 300.000 1.500
300.000 5 15.000 600.000 16.500
30.000 30.000
70.000 5 3.500 100.000 3.500
200.000 10 20.000 300.000 23.500
6.000 6.000
66.000 20 13.200 72.000 13.200
195.000 30 58.500 267.000 71.700


Heirs have an obligation to file a tax return within 6 months after the date of death or after the publication of the deceased’s will, if there is one. If, at the time of death, the testator or the heirs reside(s) abroad, the deadline is 12 months accordingly. The deadline may be extended for up to 3 months following an application of the tax payer to the relevant tax office.

2) Taxation of gifts inter vivos

The assets which are subject to taxation of gifts inter vivos are the following: a) Property of any kind situated in Greece.b) Movable property situated abroad owned by a Greek national.c) Movable property situated abroad which owned by a foreigner and gifted to a Greek national or a foreigner residing in Greece.

As for the rest, the same provisions apply to gifts inter vivos as with inheritance tax.As an exception, by virtue of law 3842/2010 monetary gifts inter vivos are taxed @ 10% when the gift is given to a relative of category A’, 20% for category B’ and 40% for category C’

3) Taxation of winnings from lottery games etc.

Winnings from lottery games, games of chance, instant lotto, football betting etc. are taxed at a rate ranging from 10% to 20%. The person who wins is liable to pay the tax and the tax liability arises at the time of payment. The payer of the amount has an obligation to file a tax return declaring the sum and the beneficiary within 30 days from the day the payment.

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