Value-added tax (VAT)
The standard VAT rate is 24% (applicable to all goods and services that are not subject to the reduced or super-reduced VAT rate, which are explicitly enumerated in the law).
A reduced VAT rate of 13% applies, inter alia, to fresh food, non-alcoholic beverages (without the addition of alcohol in any proportion) and aerated waters, basic types of foodstuff (e.g. oil, coffee, sugars) along with food services supplied by restaurants (with the exemption of alcoholic beverages in any proportion), 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), the care of children, the elderly, and the disabled, accommodation in hotels or similar establishments (including holiday accommodation and letting of places in camping or caravan sites), the transport of persons and their baggage, supply of services by fitness centres and dance schools, the import of works of art, collections, or antiquities, the supply of works of art by their creator or one's successors in title, mask and gloves for protection against viruses, etc.
A super-reduced rate of 6% is applicable to medicines of CN3003 and 3004 and vaccines of CN3002 intended for human medicine. The aforementioned rate is also applicable, inter alia, to the supply of electricity, gas, and district heating, tickets to theatres, cinemas, concerts, zoos and also tickets to sport events, books and children’s books, colouring and drawing books, music books, newspapers, magazines, and e-books, and prepared foods for animals (excluding dog or cat food).
Moreover, the above VAT rates are reduced by 30% (i.e. they are 17%, 9%, and 4%, respectively) in the Aegean islands of Chios, Kos, Lesvos, Leros, and Samos, under certain conditions.
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 services connected to exports to non-EU countries are also exempt (zero rated).
With the following exceptions, real estate leases are generally exempt from VAT. Commercial leases and 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 2024 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.
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 (IAPR). However, up to date, no such Decision has been issued, and the provision remains, in practice, inactive. Moreover, by virtue of Law 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 Law 4484/2017, Article 39 (a) of the Greek VAT Code (Law 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, as per the provisions of Decision 1439/2019, as of December 2019, for the conclusion of the abovementioned transactions, both parties (purchaser/seller) should follow a specific procedure through the electronic platform that was put into operation for this purpose by the IAPR.
Moreover, based on Law 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.
Finally, by virtue of Law 4714/2020, the provisions of Directive (EU)1910/2018, which establishes a common regulatory framework for the simplification of call-off stock arrangements, allocation of transport for chain transactions, and the conditions for applying the VAT exemption for intra-Community supplies (the so-called 'quick fixes'), were transposed in the national legislation and entered into force as of 1 January 2020. As regards specifically chain supplies, it should be noted that, on the basis of Circular E. 2019/2022, it has been clarified that the provisions for chain transactions do not affect the implementation of the simplification for triangular transactions.
As of July 2021, new VAT rules are introduced in relation to the new One-Stop Shop (OSS) scheme and the Import One-Stop Shop (IOSS).
The main changes are the following:
Online sellers, including online marketplaces/platforms can register in one EU member state and this will be valid for the declaration and payment of VAT on all distance sales of goods and cross-border supplies of services to customers within the European Union.
The existing thresholds for distance sales of goods within the European Union will be abolished and replaced by a new EU-wide threshold of EUR 10,000. Below this EUR 10,000 threshold, the supplies of telecommunications, broadcasting and electronic (TBE) services and distance sales of goods within the European Union may remain subject to VAT in the member state where the taxable person is established.
Special provisions are introduced whereby online marketplaces/platforms facilitating supplies of goods are deemed for VAT purposes to have received and supplied the goods themselves ('deemed supplier').
In addition, new record keeping requirements are introduced for online marketplaces/platforms facilitating supplies of goods and services, including where such online marketplaces/platform are not a deemed supplier.
The VAT exemption at importation of small consignments of a value up to EUR 22 has been removed. This means all goods imported in the European Union will now be subject to VAT.
A new special scheme for distance sales of low goods imported from third territories or third countries has been created. The IOSS has been created to simplify the declaration and payment of VAT.
Finally, simplification measures for distance sales of imported goods in consignments not exceeding EUR 150 has been introduced, in case the IOSS is not used (special arrangements).
On a separate note, on 7 December 2021, the Economic and Financial Affairs Council (Ecofin) reached an agreement on a proposal for a Council Directive aiming to provide more flexibility to EU member states in the setting of VAT rates, while at the same time ensuring that the application of reduced rates is in line with EU policies in the fields of health protection, green economy, public interest, and digital transition. The respective rules are expected to apply from 1 January 2025.
Indicatively, the new rules provide an option to apply reduced VAT rates on goods intending at health protection (e.g. medical equipment, protective gear, health protection masks), fighting climate change (e.g. solar panels, specific heating systems), and services supporting digitalisation (e.g. Internet access services). Furthermore, the new rules provide for the option to apply reduced VAT rates to the supply and construction, as well as the renovation and repair, of housing.
It is also noted that, for a limited number of goods and services and under conditions, the application of a reduced rate lower than 5% and an exemption with a right to deduct input VAT shall also be possible.
As regards Greece in particular, a possibility to apply reduced VAT rates up to 30 % in the departments of Lesbos, Chios, Samos, the Dodecanese, the Cyclades, Thassos, Northern Sporades, Samothrace, and Skiros is introduced.
As a last note, from 1 January 2025, Greece will have the option to choose (depending on its fiscal situation) whether to apply a reduced rate of 13% or even zero to transfers of new buildings.
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, coffee, liquids used in electronic cigarettes, and the tobacco contained in electrically heated tobacco products. The tax rates vary depending on the category of products.
According to Art. 6A of L. 2939/2011, as amended by Art. 97 of L. 4685/2020, a special plastic bag duty is imposed on consumers per piece of thin plastic bag they use (except for biodegradable bags, which are not subject to this duty). The rate of the duty is 7 cents per plastic carrier bag.
Furthermore, the application of a uniform call rate, at 80 cents per kilogram, to the weight of plastic packaging waste that is generated in each Member State and is not recycled was introduced through Council Decision (EU, Euratom) 2020/2053 of 14 December 2020, which was implemented in Greece by L. 4783/2021.
According to Art. 106 of L. 4819/2021, an environmental protection levy of 4 cents (per product) is imposed on the plastic products that are available as packaging of food and beverages during their sale by mass catering companies or by retail companies. In plastic products, the plastic cover or lid is considered as a distinct product, for which the levy is imposed separately.
Moreover, a recycling duty was introduced by virtue of Art. 80 of L. 4819/2021, imposing on consumers as of 1 June 2022 a duty of 8 cents per piece the packaging of which contains polyvinyl chloride (PVC).
These special levies are imposed on consumers at purchase and collected and rendered to the state by every trader who is selling these products. They are subject to VAT.
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 16.20 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 9.2500 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 (increased by a municipality surcharge to a total rate of 3.09%).
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 issuances.
Other stamp duties may apply in certain limited cases.
Capital accumulation tax following incorporation
Capital accumulation tax applies on any capital accumulation transactions, at a rate that has been recently reduced to 0.5% as regards transactions for which the tax liability arises from 1 October 2021 onwards. In particular, said tax is imposed on capital accumulation (share capital increase) by:
- commercial companies and joint ventures
- any type of association 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 on capital is payable to the competition committee.
The capital accumulation tax is not 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.
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.
As of 1 June 2022, for the primary social security fund (EFKA), social security contributions are withheld at 13.87% (14.12% up to 31 May 2022) at the level of the employee and contributed at 22.29% (22.54% up to 31 May 2022) at the level of the employer. The monthly social security contribution cap for EFKA is set at EUR 6,500.