Value-added tax (VAT)
The standard VAT rate is 24% (applicable, inter alia, to all standard and processed foods, transportation services, food services, repair services, medical and dental services, and entertainment tickets [excluding theatre tickets]).
A reduced VAT rate of 13% applies, inter alia, to fresh food, to care of children, the elderly, and the disabled, and to accommodation in hotels or similar establishments (including holiday accommodation and letting of places in camping or caravan sites). A super reduced rate of 6% for medicines of CN3003 and 3004, and vaccines of CN3002 intended for human consumption, is applicable. The aforementioned rate is also applicable for children’s books, colouring and drawing books, newspapers, magazines, and theatre tickets.
As of 20 May 2019, some basic types of foodstuff (e.g. oil, coffee, sugars) along with food services supplied by restaurants have been reclassified to the reduced VAT rate (13%). Furthermore, the supply of electricity and gas, as well as distinct heating, has been reclassified to the super reduced rate (6%).
Furthermore, as of 12 December 2019, immunological products for human treatment of heading 3002 are transferred to the super reduced VAT rate, in addition to vaccines for which this rate was already applicable.
In addition, as of 1 January 2020, the reduced VAT applies for the following commodities:
- Infant and child nutrition products, packaged for retail sale.
- Bicyclist helmets.
- Items for the safety and protection of infants (absorbent diapers for infants and child car seats).
Supplies of goods and services to individuals and legal entities subject to VAT and established in EU countries (intra-Community supplies) are exempt from VAT (zero rated). Exports of goods and certain services to non-EU countries are also exempt (zero rated).
With the following exceptions, real estate leases are generally exempt from VAT. Lease contracts for shopping centres and logistics centres may be subject to VAT on the condition that the taxable person opts for the submission to taxation of the leasing right. Additionally, a right to elect to subject leases of property used for the exercise of professional activities, either independently or as part of mixed contracts, to VAT applies.
Furthermore, VAT will be suspended until 31 December 2022 and real estate transfer tax will be levied on all unsold real estate with a construction permit issued from 1 January 2006 onwards, upon relevant application by taxable persons.
By virtue of Decision A.1470/2019, an extension of the reduced VAT regime (30% reduction) until 30 June 2020 was granted for the following islands of the Aegean Sea:
Moreover, by virtue of Law 4334/2015, for transactions exceeding 3,000 euros (EUR) between entrepreneurs that are obligatorily settled through the use of a professional bank account or bank cheque and for transactions exceeding EUR 500 between entrepreneurs and individuals that are obligatorily settled through the use of a credit or debit card or e-banking or bank deposit or a bank cheque, the intermediary bank is obligated to withhold the relevant VAT amount corresponding to the total amount of the transactions and to pay said VAT directly to the Greek state within five days from said payment, by issuing the respective certificate on the collected amount of VAT to VATable persons. Banks should not charge any fee or other charges for the implementation of the above-mentioned services. The above provision is known as the ‘VAT split payment’ provision.
By this provision, an obligation to immediate payment of the VAT due is imposed by the separation/split of the transaction value from the corresponding VAT due and the block of the VAT amount until its payment to the Greek state (‘split payment’ system).
The recipient of the invoice or the retail receipt must pay the transaction through the use of a bank payment instrument, separating/splitting the VATable value from the corresponding VAT, so that the credit institution may transfer the VAT due automatically to a blocked bank account.
The procedure of application of said provision and any other issue relating to the payment and refund of VAT will be regulated by a decision to be issued by the Independent Authority for Public Revenue. However, up to date, no such Decision has been issued, and the provision remains, in practice, inactive. Moreover, by virtue of L. 4446/2016, the quantitative threshold of annual turnover up to which taxable persons may pay the VAT to the state upon settlement of the invoices (special regime of Article 39 (b) of the Greek VAT Code) was increased from EUR 500,000 to EUR 2 million.
Moreover, by virtue of Article 67 of L. 4484/2017, Article 39 (a) of the Greek VAT Code (L. 2859/2000) was amended as regards the goods and services that are subject to the domestic reverse-charge mechanism. Based on the new provision, the domestic supply by a taxable person to another one of mobile telephones, being devices, game consoles, tablet personal computers (PCs), and laptops, are subject to the reverse-charge mechanism. The above amendment constitutes an incorporation of the relevant provisions of Article 199a of EU VAT Directive (2006/112/EC) into the Greek legislation. Further clarifications have been granted through Circular 1150/2017. The above provisions are applicable as of 1 August 2017.
Moreover, based on L. 4549/2018, the taxable value, in case of transactions between related parties as determined for income tax purposes, is considered to be the actual value, in case the consideration agreed is lower, provided that the supplier or the recipient do not have full right to deduct VAT.
Many goods imported into Greece from outside the European Union are subject to customs duties. The rates of duty are provided by the EU’s Common Customs Tariff.
Excise taxes are imposed on energy and electricity products (e.g. petrol, natural gas, electricity), manufactured tobacco, alcoholic products, and coffee. The tax rates vary depending on the category of products.
Uniform Tax on the Ownership of Real Estate Property (ENFIA)
The ownership of real estate property/property rights in Greece is subject to the ENFIA, which consists of a principal tax imposed on each real estate property and a supplementary tax imposed on the total value of the property rights on real estate property of the taxpayer subject to tax.
More specifically, said tax is not imposed on the objective value of real estate property, but is determined on the basis of various factors, according to the final registration of the property at the land registry or ownership title.
The principal tax on buildings is calculated by multiplying the square metres of the building by the principal tax ranging from EUR 2 to EUR 13 per square metre and other coefficients affecting the value of the property (e.g. location, use).
The principal tax on land is calculated by multiplying the square metres of the land by the principal tax ranging from EUR 0.0037 to EUR 11.25 per square metre and other coefficients affecting the value of the property (e.g. location, use).
The supplementary tax is imposed on the total value of the rights to property at a rate of 5.5‰. Self-used real estate is taxed at the reduced rate of 1‰.
Real estate transfer tax
Each transfer of real estate, which is not subject to VAT, is subject to real estate transfer tax. The real estate transfer tax is imposed at a rate of 3% on the taxable value of the property.
Rentals of non-residential properties are subject to 3.6% stamp duty (with the exception of shopping centres and logistics centres subject to VAT).
In general, loans and interest may be subject to a 2.4% stamp duty. However, there are a number of exemptions, the main one covering bank loans and bond issues.
Other stamp duties may apply in certain limited cases.
Contribution tax on capital accumulation following incorporation
A 1% tax contribution is imposed on capital accumulation (share capital increase) by:
- business companies and joint ventures
- associations of all degrees and any other form of company, legal entity, or union of persons or society aiming to make profits, and
- branches of foreign companies (unless of EU origin).
For Greek Société Anonyme (SA) companies, an additional 0.1% duty is payable on capital to the competition committee.
The capital concentration tax is no longer imposed upon the incorporation/establishment of legal entities.
Employers are liable to submit payroll withholding taxes on monthly salary payments (following the grossing-up to the yearly salary) at the following tax scale:
|Taxable income (EUR)||Tax rate (%)|
|Up to 10,000||9|
|10,001 to 20,000||22|
|20,001 to 30,000||28|
|30,001 to 40,000||36|
Reductions may apply depending on the amount of the annual taxable income received by individual taxpayers and by the number of the dependent children the individual taxpayer has.
Additionally, based on Law 4387/2016, the special solidarity contribution has been incorporated into the ITC, and its extraordinary character has been abolished. Moreover, employers shall submit withholding of the special solidarity contribution on salary payment, based on the following progressive rate:
|Taxable income (EUR)||Tax rate (%)|
|Up to 12,000||0|
|12,001 to 20,000||2.2|
|20,001 to 30,000||5.0|
|30,001 to 40,000||6.5|
|40,001 to 65,000||7.5|
|65,001 to 220,000||9.0|
Benefits in kind are, in principle, subject to payroll taxes. However, to the extent that it is difficult to proceed to an evaluation of such benefits at the time of their granting, no employment withholdings are effected thereon, instead their value (assuming such benefits are taxable) shall be added to the employment income of the beneficiaries and be taxed upon the clearance of the annual income tax return filed by the employees.
Social security contributions
Social security contributions are due on salary and benefits in cash or in kind granted by an employer to its employees, with the exception of specifically enumerated extraordinary benefits of social character (e.g. marriage gifts, birth gifts). The imposition of social security contributions depends on the social security fund in which the employee is registered.
For the primary social security fund (EFKA), social security contributions are withheld at 15.75% at the level of the employee and contributed at 24.81% at the level of the employer. The monthly social security contribution cap for EFKA is set at EUR 6,500.