This country-specific Q&A provides an overview of Tax laws and regulations applicable in Greece.
How often is tax law amended and what are the processes for such amendments?
The Greek tax regime is, in general, stable. Amendments of Greek tax legislation take place frequently (approx. 3-4 times per annum) focusing however on specific tax matters and areas of taxation. In principle, Greek income taxation is subject to more frequent changes compared to indirect and Greek inheritance/gift taxation.
Tax law amendments require the passing of a bill by the Greek Parliament, which usually follows a long public consultation period.
What are the principal procedural obligations of a taxpayer, that is, the maintenance of records over what period and how regularly must it file a return or accounts?
Greek taxpayers are in principle obliged to maintain proper substantiation documents and tax-related records for periods of time that depend on the statute of limitations applicable to each type of taxation. The general rule on the statute of limitations is in principle a 5 years period, which may be extended under specific circumstances up to 10 years.
Depending on the nature of tax due (e.g. income tax, VAT, withholding taxes), Greek taxpayers are subject to tax reporting obligations (e.g. filing of tax returns) on a monthly, quarterly or annual basis.
Who are the key regulatory authorities? How easy is it to deal with them and how long does it take to resolve standard issues?
The Independent Authority of Public Revenue (“IARP”) is the key regulatory tax authority. IARP is competent on the issuance of interpretational guidelines and instructions to taxpayers with regard to all tax matters, regardless of the nature of tax involved, whereas it exercises such power rather frequently.
Besides the issuance of general interpretational guidelines, Greek taxpayers are entitled to file specific queries to the IARP with regard to specific tax matters of concern. Any written response issued by the IARP to any such individual query is not binding for the Greek tax authorities.
Are tax disputes capable of adjudication by a court, tribunal or body independent of the tax authority, and how long should a taxpayer expect such proceedings to take?
Tax disputes begin with an administrative recourse before the Dispute Resolution Directorate. The Directorate is obliged to issue a decision within 4 months as of the filing date. If the Directorate rejects the recourse, the taxpayer may appeal to the administrative courts within 1 month as of the service of the decision. Tax disputes proceedings may take from 4 months (cases before the Dispute Resolution Directorate) to 10 years (cases before the Council of State) in order to be resolved.
Are there set dates for payment of tax, provisionally or in arrears, and what happens with amounts of tax in dispute with the regulatory authority?
The payment of taxes by both legal entities and individuals is due on specific dates, depending on the nature of tax due. If the taxpayer is against a tax obligation and decides to file an administrative appeal before the Dispute Resolution Directorate, then 50% of the tax liability has to be paid, until a judgement is issued. The administrative appeal suspends the payment of 50% of the disputed amount, if the remaining 50% has been paid. If the taxpayer succeeds in his case, then the amount paid (50% as explained above), will be refunded. If the recourse is rejected, then the suspended 50% will be paid to the State with interest. In addition, a taxpayer may file a tax return with a reservation if they seek to challenge a tax position without risking penalties. The rejection of the reservation (whether express or tacit) may be challenged before the Dispute Resolution Directorate and/or the tax courts.
Is taxpayer data recognised as highly confidential and adequately safeguarded against disclosure to third parties, including other parts of the Government? Is it a signatory (or does it propose to become a signatory) to the Common Reporting Standard? And/or does it maintain (or intend to maintain) a public Register of beneficial ownership?
Taxpayers’ data constitute personal data, therefore it is highly confidential and is safeguarded according to the General Data Protection Regulation and Greek Code of Tax Procedures. Exceptionally, taxpayers’ data may be disclosed to third parties, such as officials of the tax administration, the State Legal Council, judicial authorities in the context of the investigation and prosecution of offences. Taxpayers’ data can also be disclosed to non-Greek tax authorities, according to the provisions of Directive 2011/16/EE.
Furthermore, Greece has implemented the Common Reporting Standard (CRS) on the 13th of October 2016, pursuant to Law 4428/2016 by virtue of which it has ratified the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information.
Finally, Greece maintains since 2018 a public Register of beneficial ownership pursuant to Law 4457/2018, by virtue of which the Directive 2015/849/ΕΕ was transposed into Greek law.
What are the tests for residence of the main business structures (including transparent entities)?
Companies deemed to be tax resident in Greece are the ones either incorporated under Greek law or effectively managed from Greece, on the basis of various criteria such as residence of BoD members, location of BoD meetings etc.
Have you found the policing of cross border transactions within an international group to be a target of the tax authorities’ attention and in what ways?
Greek tax authorities have not shown any particular vigilance in policing cross border transactions. A common area of dispute is the classification of outbound payments as services or royalties and the imposition of the respective withholding tax rate.
Is there a CFC or Thin Cap regime? Is there a transfer pricing regime and is it possible to obtain an advance pricing agreement?
Under the domestic tax system, there is a CFC regime, an interest limitation (thin capitalization) rule as well as a transfer pricing regime, in accordance with EU and OECD guidance. Greek tax authorities follow the OECD Transfer Pricing Guidelines. APAs are also available.
Is there a general anti-avoidance rule (GAAR) and, if so, in your experience, how would you describe its application by the tax authority? Eg is the enforcement of the GAAR commonly litigated, is it raised by tax authorities in negotiations only etc?
There is a GAAR as well as various special anti-avoidance rules. However, such rules are not frequently invoked in tax audits and, thus, there is no significant volume of case law in this respect.
Is there a digital services tax? If so, is there an intention to withdraw or amend it once a multilateral solution is in place?
Greece does not currently impose a digital services tax.
Have any of the OECD BEPs recommendations been implemented or are any planned to be implemented and if so, which ones?
In general, Greece adopts EU tax related measures into its domestic legal order, without taking any unilateral domestic measures or specific legislative initiatives in this respect. In particular, Greece has transposed EU Directives on BEPS measures such as anti-hybrid rules, CFC, interest limitation rule etc.
In addition, Greece is amongst the 136 countries of the OECD/G20 Inclusive Framework on BEPs which have joined the October 2021 Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.
In your view, how has BEPS impacted on the government’s tax policies?
Greece has opted to apply only the minimum standard (i.e. in essence the principal purpose test) and has made a reservation for the implementation of most of the other provisions in the MLI, indicating the State’s intention not to alter significantly its policies in order to be aligned with BEPS initiatives.
Does the tax system broadly follow the recognised OECD Model? Does it have taxation of; a) business profits, b) employment income and pensions, c) VAT (or other indirect tax), d) savings income and royalties, e) income from land, f) capital gains, g) stamp and/or capital duties. If so, what are the current rates and are they flat or graduated?
In general, the Greek tax system follows the OECD Model.
With respect to individual taxation, tax rates differ depending on the categories of income realised. The main categories of income are (i) employment/pension income, (ii) business income, (iii) investment (passive) income (dividend, interest, royalties and rental income) and (iv) capital gains.
Typically, investment income and capital gains are subject to flat tax rates (e.g. dividend income is subject to a final 5% income tax, interest and capital gains are subject to a final 15% income tax, royalties are taxed at a final 20% income tax), whilst business, employment, pension and rental income realized by individuals is subject to the below progressive income tax rates:
Tax rates (%)
0 – 10.000
10.001 – 20.000
20.001 – 30.000
30.001 – 40.000
Tax rates (%)
0 – 12.000
12.001 – 35.000
All income received by a legal entity is considered as business income and is subject to corporate income tax at a flat rate of 22%.
With respect to indirect taxation, Greece levies VAT and stamp tax. VAT rates differ depending on the geographical area and the type of transaction involved. The standard VAT rate is 24% on the taxable value, whereas by way of exception, the reduced VAT rates of 13% and 6% may apply for categories/groups of goods of specific tariff class codes or extracts thereof (“EX”) and services of Annex III of the VAT Code . To be noted that for the islands of Leros, Lesvos, Kos, Samos and Chios, the special reduced VAT rates (namely, the standard VAT rates mentioned above 24%, 13% and 6% reduced by 30%) are set at 17%, 9% and 4% for specific type of supplies of goods and services, upon conditions. Stamp duty tax rates are 2,4% for certain commercial transactions conducted by freelancers/legal entities, or 3,6% for the other cases (by way of exemption 1,2% stamp duty may also apply in few transactions).
Is the charge to business tax levied on, broadly, the revenue profits of a business as computed according to the principles of commercial accountancy?
Yes; there are specific rules for the determination of taxable income in the sense that there is exempt income (qualifying dividends and capital gains) and non-deductible expenses, as well as special provisions for the computation of bad debt provisions and capital gains. Moreover, there are several tax related incentives.
Are different vehicles for carrying on business, such as companies, partnerships, trusts, etc, recognised as taxable entities? What entities are transparent for tax purposes and why are they used?
The notion of tax transparency is uncommon in Greece. All entities, whether domestic or foreign, and irrespective of their legal type, are treated as separate taxpayers with the exception of certain venture capital funds.
Is liability to business taxation based upon a concepts of fiscal residence or registration? Is so what are the tests?
See response to question 7.
Are there any special taxation regimes, such as enterprise zones or favourable tax regimes for financial services or co-ordination centres, etc?
Regarding individual taxpayers, Greece has introduced as of December 2019 three different alternative taxation (non-dom) regimes for individuals wishing to transfer their tax residence to Greece. Such non-dom regimes aim to render the country attractive from a tax point of view, by providing incentives to individuals who wish to relocate to Greece. Such non-dom regimes target high-net-worth individual investors, pensioners and employees/freelancers.
Moreover, under certain conditions, Greek companies or Greek branches of foreign companies may obtain the L.89/69 status, provided they are solely engaged in the provision of certain intra-group services of ancillary nature. The main benefit of the so-called “L. 89” status is that the tax basis of the Greek entity/branch is a margin of its costs; Said margin is pre-agreed with the Greek authorities and is therefore not easily challenged in case of audit.
In addition, on 17.02.2021, the Greek Parliament ratified a new law that introduced family offices in the Greek Income Tax Code, which are subject to a special tax regime. The exclusive objective of a family office may be (a) the administration and management of the family’s assets and investments, (b) the management of expenses incurred for the family’s needs and the management of the family’s living expenses in general and (c) the management of the family’s charitable and cultural activities. Family offices, similarly to the L. 89 status, are taxed on a cost-plus basis, namely the gross income deriving from the services provided is calculated by adding a 7% profit margin to all of the family office’s expenses.
Are there any particular tax regimes applicable to intellectual property, such as patent box?
A 200% super deduction applies to certain R&D expenses. Tax deferral may also apply to income from the exploitation of certain patents on conditions. There is no specific patent box regime.
Is fiscal consolidation employed or a recognition of groups of corporates for tax purposes and are there any jurisdictional limitations on what can constitute a group for tax purposes? Is a group contribution system employed or how can losses be relieved across group companies otherwise?
There is neither fiscal consolidation regime nor the Greek tax law recognizes tax groups.
Are there any withholding taxes?
Yes. Greece broadly levies withholding taxes on dividends, interest, royalties and fees for consulting, technical and management services paid, in principle, to individuals (both residents and non-residents) and non-resident legal entities, at the respective rates of 5% for dividends, 15% for interest and 20% for royalties and services. Note that royalties and fees paid to resident companies are not subject to withholding taxes.
With respect to WHT on dividends and interest paid to non-resident legal entities, in principle the domestic rate applies, subject to double tax treaty override. Such rate may be reduced to nil in case the requirements under the applicable EU directive (parent-subsidiary or interest-royalty respectively) are met.
Are there any recognised environmental taxes payable by businesses?
Greece has adopted certain taxes aiming to counter the excessive use of non-recyclable single use plastic products, as enacted under EU legislation.
Is dividend income received from resident and/or non-resident companies exempt from tax? If not how is it taxed?
Dividends received from (domestic or EU-resident) entities qualifying for the participation exemption (i.e. broadly a 10% minimum shareholding for an uninterrupted 24-month period at least) are exempt from corporate tax, subject to anti-avoidance rules. In case of non-qualifying participations, dividends received are taxable as normal business profits at 22%, while a foreign tax credit is granted. Participation exemption does not apply to non-Greek and non-EU sourced dividends.
If you were advising an international group seeking to re-locate activities from the UK as a result of Brexit, what are the advantages and disadvantages offered by your jurisdiction?
For all the years the UK was in the EU, because of the Parent/Subsidiary and the Interest/Royalty Directives, payments of dividends, interest and royalties to UK parent companies travelled free of WHT. Unfortunately, Brexit contained no “deal”. Therefore, such payments will now suffer WHT that national laws and double tax treaties provide. Greece, having implemented fully these directives and additionally offering a participation exemption regime for dividends and capital gains, provides a gate-away for previously UK based companies. Moreover, the continuous modernization of the Greek tax system and the introduction of tax related benefits create an overall competitive environment to host business ventures.
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