Guide to Greece’s Tax System: Everything You Need to Know About Taxes

Greece has a well-known rich history, beautiful picturesque islands and a mild climate, which has been attracting those looking for the perfect place to relax and reside in for many years. It has everything for a comfortable life, including excellent infrastructure, a high level of healthcare and education, a stable political and economic situation, and the cost of living is lower than in other European countries, making it much more affordable to live. In addition, it is relatively easy to legalise your status in Greece; along with the standard ways of obtaining a residence permit, the Greek Golden Visa is currently one of the most accessible and fastest programmes in the world.

Moving to a new country is always an important event that requires careful preparation. In order to successfully settle in a new environment, you need to understand local laws, customs and everyday details; from the operation of transport, to methods of paying for utilities.

In this article we tell you everything you need to know about the tax system in Greece.

How to Change Tax Residency to Greek

To obtain tax residency in Greece, as in most European countries, you must spend at least 183 days a year in the country. To become a tax resident of Greece and change your tax jurisdiction, it is not enough to simply come to the country. Becoming a tax resident is open only to foreigners who have received a residence permit or have proven close social and economic ties that form the centre of their vital interests on Greek territory. This means that ordinary tourists or persons arriving for medical treatment do not have the right to claim tax residency in Greece.

The 183 days starts from the moment of entry into the country, with short-term trips to Schengen countries not taken into account during this period. An application for a change of tax status can be submitted until the end of the current tax year, i.e. until March 31, in which the tax office will review the application within 2 months.

If a foreigner does not have official employment, taxes are paid in advance within 30 days after the change of tax residency. This payment will be taken into account when filing the declaration.

Residents of Greece are required to pay taxes on all their income, while non-residents are required to pay taxes only on income received within the country.

Taxes in Greece

Taxes in Greece apply to regular income, rental income, property, inheritance and gift, etc.

Income Tax for Individuals

Income tax in Greece, as in most European countries, has a progressive scale. The higher the income, the higher the tax rate:

• Up to €10,000 per year – 9%
• From €10,000 to €20,000 per year – 22%
• From €20,000 to €30,000 per year – 28%
• From €30,000 to €40,000 per year – 36%
• Over €40,000 per year – 44%

The increased rate does not apply to all income, but only to that part of it that falls within the appropriate range.

Tax on rental income is also applied on a progressive scale, depending on the amount of income:

• up to €12,000 — 15%
• from €12,000 to €35,000 – 35%
• over €35,000 – 45%

Additionally, a solidarity contribution is paid, which also depends on the amount of income:

• Up to €12,000 — 0%
• €12,000 — €20,000 — 2.2%
• €20,000 — €30,000 — 5%
• €30,000 — €40,000 — 6.5%
• €40,000 — €65,000 — 7.5%
• €65,000 — €220,000 — 9%
• Over €220,000 – 10%

Property Taxes

VAT in Greece is 24%, but for real estate transactions it is frozen throughout the country. The buyer only pays the tax on the transfer of ownership, which is only 3.09%.

In addition, Greek property owners pay the following taxes:

Single Tax on Real Estate Ownership (ENFIA). This is calculated based on several factors: location of the property, area, year of construction, use, etc., and usually ranges from €2-13 per sq. m.

Additionally, the tax may be increased:

• for individuals, if the value of the property exceeds €500,000
• for legal entities, if the value of the property exceeds €250,000

Additional tax. Real estate worth more than €300,000 is taxed at a rate of 0.1% to 1% of the assessed value for a single owner and €600,000 for shared ownership.

Municipal Property Tax (TAP). The fee is paid once a year and depending on the location of the property, is 0.025-0.035%.

Special property tax for legal entities: 15% of the cadastral value of the property.

Taxes on Movable Property

Cruise Tax (TEPAI) for owners of pleasure craft, including yachts and sailboats, is payable regardless of whether the owner is a resident of Greece or not. This applies to all vessels that plan to navigate the country or dock in Greece. It is calculated based on the length of the vessel:

• up to 7 m — €0
• 7-8 m – €16 per month
• 8-10 m — €25 per month
• 10-12 m — €33 per month
• more than 12 m – €8 per m of length per month

Transport tax varies depending on the category and engine size, and can range from €22 to €1,260 per year. This tax does not apply to electric vehicles registered in the EU before 2010.

Luxury tax is 10% for some products, including fur and leather clothing and footwear, as well as jewelry, and 20% for private aircraft and helicopters.

Other taxes in Greece

VAT. The basic VAT rate is one of the highest in the EU at 24%. However, preferential conditions are provided for certain types of activities:

• 13% – for essential goods, services of catering enterprises, tourism and hotel accommodation
• 6% – for medical products, printed materials, utilities, etc.

On select Greek islands (Lesbos, Leros, Kos, Samos and Chios) reduced VAT rates apply: 17%, 9% and 4% respectively.

Stamp duty charged for financial and legal transactions at a rate of 2.4%, and 3.6% for leased out non-residential premises.

Income tax for legal entities the rate is calculated at 24%, for credit institutions – 29%, and for agricultural cooperatives – 10%.

When selling shares of companies from EU countries, you do not have to pay tax if your shareholding is more than 10% and your ownership period is at least 2 years.

Inheritance and gift tax: The tax rate can range from 1% to 40%, and is calculated individually and depends on many factors, including the degree of kinship, and the conditions of gift or inheritance. Similar conditions apply to gifts, dowry and lottery winnings.

Tax at source of payment applies at the following rates:

• For dividends – 5%
• For interest – 15%
• For royalties – 20%
• For certain types of services (consulting, technical, etc.) – 20%.

Capital increase levy: 1%.

Social insurance makes up 35.16% and is divided between the employer and the employee – 21.79% and 13.37% respectively.

Although Greek taxes may seem high, there are opportunities to optimise them in Greece. Firstly, there are tax deductions that allow you to reduce the amount of tax, for example, through charitable contributions or social security contributions. Secondly, the government offers benefits for foreign residents which are outlined below.

Tax benefits in Greece for foreign citizens

Greece has a preferential tax regime for Non-Dom residents that allows for tax optimisation and a lower burden.

The regime is available for 3 categories of foreigners:

• Wealthy foreigners and investors

To qualify for preferential conditions, you must not have been a tax resident of Greece for 7 of the last 8 years preceding the application and have made investments of at least €500,000 in real estate, financial investment products or Greek business. The investment must be made 3 years before you plan to change your tax jurisdiction.

All taxes on income earned abroad are replaced by a fixed annual payment of €100,000. If relatives of the main applicant plan to use this regime, then in addition to this rate, a charge of €20,000 per year will need to be paid for each additional family member in the application.

For high-income earners, the flat rate is often more advantageous than paying income tax at the top rate of 44%. In addition, there is no need to pay tax on gifts, inheritances, and assets abroad, and there is no need to declare your worldwide income in Greece. The preferential regime is valid for 15 years and cannot be extended – after the expiration of the term, you will pay taxes on the same basis as residents of the country.

• Business professionals with a company in Greece and employees

Professionals receive a 50% income tax exemption for 7 years when changing tax residency to Greek. Citizens of EU countries, EEA countries, and countries with which Greece has signed a tax cooperation agreement can take advantage of these conditions. Two more conditions of this benefit are: you must not have been a tax resident of Greece for 5 of the last 6 years, and you must confirm that you plan to live in Greece for at least the next 2 years.

• Pensioners

Those receiving a pension in another country and changing their tax residency to Greece, can pay only 7% on all worldwide income for 15 years – except for inheritance and gifts of assets. Pensioners also receive an exemption from paying solidarity contributions. The conditions are similar: you must not have been a tax resident of Greece for 5 of the previous 6 years.

Greece has a popular Golden Visa programme that allows you to obtain a 5-year renewable residence permit for your entire family. Investors using the programme must purchase real estate in the country for at least €250,000 to qualify.

From September 1, 2024, Greece is divided into 2 investment zones with different entry thresholds with properties valued from:

• €800,000 – in Athens, Thessaloniki, all of Attica, on the islands of Crete, Mykonos, Santorini and others, with a population of 3,100 people
• €400,000 – in all other regions of the country

Investors are allowed to purchase 1 property with an area of ​​120 m² or more.

There is an exception that allows you to take part in the programme for a minimum cost of €250,000. This is for real estate that:

• Has cultural and historical value and needs restoration
• Is converted from commercial to residential 

It is possible to purchase any object, regardless of location and the size of the property.

In the second case, the developer buys a commercial building and is obliged to completely reconstruct it, taking into account all energy efficiency and safety requirements in force in Greece. As a result, the investor receives a renovated apartment in a new modern residential complex, which is no different from a new building.

Most of these properties are located in the Attica region and Athens, allowing investors to purchase a property in one of the most popular and sought-after areas of Greece while maintaining a minimum entry threshold of €250,000.

If you are interested in obtaining a Greek residence permit for investment, contact the specialists at Astons today – our experts will review your case and offer the best solution based on your preferences and budget.