Greece

Individual - Income determination

Last reviewed - 14 September 2022

Employment income

Greek tax residents are taxed on their worldwide income irrespective of the country where such income has been generated, paid, or remitted.

Non-resident aliens are taxed on salary earned for work performed in Greece, regardless of where payment is made and regardless of where it is remitted. They are not taxed to the extent their compensation relates to services performed outside of Greece.

All fringe benefits are normally considered taxable income for the employee and hence treated as such.

Board of Directors fees/remunerations paid to Board Members are considered as salaried income and are taxed based on the respective income tax scale for salaried services.

Equity compensation

New provisions for stock option plans (SOPs) and free shares

Pursuant to the Law 4646/2019, recently amended by the Law 4714/2020, significant changes regarding the tax treatment of SOPs were introduced as of 1 January 2020 and onwards.

In particular, benefit arising from SOPs shall be exempt from salaried income taxation and will be taxed at the time of their sale as capital gains at a rate of 15%, provided they are held for at least 24 months. Should the SOPs not be held for at least 24 months, the relative income will continue to be taxed as per the preceding provisions of the law. On top, the solidarity contribution (marginal rate 10%) will apply; however, the solidarity contribution has been suspended for the years 2020 and 2021. Moreover, in case SOPs relate to small start-up entities, they are taxed at a rate of 5%, provided that they are held for at least 36 months, under conditions. The solidarity contribution (and suspended years) applies as well.

Moreover, the favourable tax treatment with the taxation of 15% and the suspension of the solidarity contribution applies for free shares (not provided at discounted price but provided for free) to the extent that they are inextricably linked with the achievement of specific required performance milestones or the occurrence of an event (e.g. completion of a specific employment period). According to the new Law, the taxable event arises at the time the free shares are actually sold and not at the time of their acquisition as happened before. In addition, for free shares there is no retention period.

Notional income

The cost of acquiring or maintaining certain assets (e.g. ownership or occupation of residence, purchase or occupation of private cars, recreation boats, construction/use/ownership of houses or swimming pools, tuition/private school fees, housekeepers [exceeding two]) give rise to deemed income, which forms the basis of taxation if this is higher than the actual declared income.

Business income

The separate taxation of income from freelancers and sole proprietorships is abolished (see the Taxes on personal income section). Instead, a unified tax scale applicable to employment income, pensions, and business profits is introduced.

Capital gains

Transfer of non-listed shares is subject to capital gain tax at the rate of 15%. Transfer of listed shares is again taxed at 15% unless specific conditions/exemptions apply.

A transfer duty of 2‰ is imposed on the gross sale proceeds of listed shares.

Dividend income

Dividends distributed within taxable periods commencing after 1 January 2020 arising from entities operating under the legal form of Société Anonyme (or Limited Liability) are taxed via corporate withholding taxation at the flat rate of 5% (said rate was set to 10% for the dividends distributed during the year 2019).

Interest income

Interest on deposits with banks operating in Greece and interest from Greek bonds and treasury bills are subject to income tax at the rate of 15%, and this tax is withheld at source with exhaustion of any further income tax liability. Non-residents are exempt from the WHT where the deposit is kept in foreign currency.

Rental income

Income from real estate property is taxed at separate rates (see the Taxes on personal income section).