January 28, 2025
GREECE TAX SYSTEM: A GUIDE
INTRODUCTION
Greece, a country renowned for its ancient history and stunning landscapes, also possesses a tax system, like many European nations, that combines direct and indirect taxes. Whether you are a resident, a business owner, or simply a visitor, understanding this system is crucial. The Greek tax system is constantly evolving, with the government implementing reforms to address challenges and promote economic development. These reforms aim to simplify the tax system, reduce tax evasion, and create a more favorable business environment.
TAX SYSTEM EXPLAINED
Income tax: This is a progressive tax levied on both individuals and corporations. For individuals, the tax rate increases as income rises.
Capital gains tax: For individuals, if the capital gain is from a sold real estate property, the tax will be at a flat rate of 15 percent. For companies, a capital gain adds to regular income and is taxable at the same rate as regular income.
Value Added Tax (“VAT”): A consumption tax applied to most goods and services. Greece has a standard rate of 24%, with reduced rates for certain essential items like food and medicine.
Special Consumption Tax: This tax is applied to specific goods like alcohol, tobacco, and fuel.
GREECE TAX BENEFIT
Greece offers a variety of tax incentives to encourage investment and economic growth. These incentives include:
- Reduced tax rates: Certain businesses and industries may be eligible for reduced tax rates, making Greece an attractive destination for investment.
- Tax breaks for research and development activities: To promote innovation and technological advancement, Greece offers tax breaks for research and development activities. This can help businesses to invest in new technologies and products, leading to increased competitiveness and economic growth.
- Exemptions for certain types of income and investments: Greece offers tax exemptions for certain types of income and investments, such as income from foreign sources and investments in specific sectors of the economy. This can help to attract foreign investment and encourage entrepreneurship.
GREECE TAX TREATIES COUNTRIES
Greece has entered into numerous tax treaties with 57 countries to avoid double taxation on income and capital. These treaties aim to prevent individuals and businesses from being taxed twice on the same income by both Greece and the other treaty country. These agreements typically include provisions for reduced withholding tax rates on dividends, interest, and royalties, as well as provisions for the allocation of taxing rights on various types of income.
The India-Greece Double Taxation Avoidance Agreement (“DTAA”) is a crucial bilateral treaty designed to prevent individuals and businesses from facing double taxation on income and capital generated in both countries. Key features include reduced withholding tax rates on dividends, interest, and royalties, provisions for determining the taxation of income from various sources, and the exchange of information between tax authorities to combat tax evasion. This agreement fosters stronger economic ties between India and Greece by minimizing tax obstacles to cross-border investments and trade.
CONCLUSION
The Greek tax system, a multifaceted framework, encompasses a variety of taxes including income tax, VAT, property tax, and levies on specific goods. While aiming to generate revenue for government services and foster economic growth, the system presents challenges such as tax evasion and debates surrounding the overall tax burden. Ongoing reforms strive to simplify the tax landscape, enhance compliance, and create a more conducive environment for businesses and individuals. Navigating this system effectively requires staying informed about the latest regulations and seeking professional guidance when necessary.
HOW WE CAN HELP?
- We provide expert advice on the intricacies of the tax system, ensuring businesses and individuals understand the territorial nature and the implications of various taxes such as Corporate Tax, Salaries Tax, and VAT.
- By offering strategic tax planning, helping to optimize tax allowances and deductions, and advising on tax-efficient investment strategies, our team can help the businesses in tackling taxation regime.
- We assist in identifying and minimizing tax risks, ensuring that businesses take advantage of tax-saving opportunities effectively.
For more information or queries, please email us at
[email protected]
Key Contact
Surendra Singh Chandrawat
Managing Partner