For many expats, moving to Greece is a dream come true because of the sunny islands, rich history, and slower pace of life. But when you move into your new house, you also have to deal with the less fun but important side of living abroad: learning about the tax system. If you know how Greek taxes affect you, it will save you time, worry, and surprise expenses, whether you intend to work, retire, or buy property.
Tax and residency requirements
The first thing you need to know is that your tax residence affects how much you pay in taxes in Greece. If you spend more than 183 days in Greece in a calendar year, you are a Greek tax resident. Also, if your “centre of vital interests” (such your family or primary business activity) is in Greece, you are a Greek tax resident.
Tax citizens have to pay taxes on all of their income, no matter where it comes from. If you don’t live in Greece, you only have to pay taxes on money you make there, such renting out property or working there. This difference is quite important for foreigners. If you’re planning a long-term stay, it’s probable you’ll become a tax resident and will need to disclose all your income to the Greek tax authorities.
Tariff on personal income
Greece has a personal income tax structure that becomes higher as you make more money. Depending on how much money you make, the rates vary from 9% to 44%. Also, workers and the self-employed must pay social security taxes, which pay for health care and retirement.
Here is a simple breakdown of the tariff bands:
- 9% for amounts up to €10,000
- 22% for amounts between €10,001 and €20,000
- 28% for amounts between €20,001 and €30,000
- 36% of the time, between €30,001 and €40,000.
- 44% for over €40,000
Expats should also know about solidarity contributions, which are extra taxes on higher wages. However, they are slowly being phased out.
Taxes on businesses and corporations
If you’re travelling to Greece to start a business or engage in commercial operations, you’ll face different tax obligations:
- Corporate tariff is set at 22% on company profits.
- Dividends are subject to a 5% withholding tariff.
- Social security contributions for employees are split between employer and employee, totaling around 36%.
If you are a self-employed expatriate or freelancer, you also need to register with the tax office and pay income tariff, social security, and advance tax payments.
Taxes on property
Buying a house in Greece is part of the fantasy for many expats. When you own property, you have to pay certain taxes:
ENFIA (Unified Property Tax)
This is yearly tariff that depends on the size, location, and value of the property.
Transfer tax
When you acquire real estate, you usually have to pay a transfer tariff of 3% of the property’s value.
Rental income tax
If you rent out your property, rental income is taxed progressively from 15% to 45%, depending on the amount.
Value added tax (VAT)
Greece, like many other EU nations, imposes VAT on products and services. The normal rate is 24%. However, certain basic things like food, literature, and medications are taxed at lower rates of 13% and 6%. Expats who own a company or rent out short-term vacation properties need to know about VAT.
Double taxation treaties
One of the major worries for expats is having to pay taxes twice: once in Greece and once in their home country. Greece has inked double taxation accords with a lot of other nations, which is good news. These deals save you from being taxed on the same income twice and frequently let you claim tax credits or exemptions.
Special tariff breaks for expats
Greece has offered incentives to get foreigners to live there in the last several years. If retirees move to Greece, they may get a flat 7% tax rate on their overseas pensions for up to 15 years. Under certain situations, foreign professionals who move to Greece for employment may be able to pay half as much in income tax for up to seven years. People who invest in the Golden Visa program get the privilege to live in the country, but if they become tax residents, their worldwide income is taxed.
Filing taxes in Greece
Every person who lives in Greece or owns property there must have a Greek Tax Identification Number (AFM). Most people submit their annual tax returns online using the TaxisNet platform before the end of the summer. Because the requirements might be complicated and the documentation and systems are in Greek, many expats use local accountants to take care of the procedure.
Conclusion
At first, the Greek tax system might seem confusing, particularly for foreigners who have to deal with income from more than one source. But with good preparation and the correct assistance, it can be done. You may make the most of your time in Greece and remain legal by learning about residence requirements, income brackets, property taxes, and the incentives that are available. Sorting out your taxes means you can appreciate everything else Greece has to offer, including going from island to island and having lengthy meals beneath the stars.
You can also view these posts:
Greece through the eyes of investors
Traveling to Greece: Visa requirements
Getting Greece passport
