InformationGreece
Greece officially the Hellenic Republic (Ελληνική Δημοκρατία), is a country in southeastern Europe, situated on the southern end of the Balkan Peninsula. It has borders with Albania, Bulgaria and the Former Yugoslav Republic of Macedonia (F.Y.R.O.M.) to the north, and Turkey to the east. The Aegean Sea lies to the east and south of mainland Greece, while the Ionian Sea lies to the west. Both parts of the Eastern Mediterranean basin feature a vast number of islands.
Greece lies at the juncture of Europe, Asia and Africa. It is heir to the heritages of ancient Greece, the Roman and Byzantine Empires, and nearly four centuries of Ottoman rule. Greece is the birthplace of democracy, Western philosophy, the Olympic Games, Western literature and historiography, political science, major scientific and mathematical principles, and Western drama, including both tragedy and comedy.
Greece is a developed country, a member of the European Union since 1981, a member of the Economic and Monetary Union of the European Union since 2001, NATO since 1952, the OECD since 1961, the WEU since 1995 and ESA since 2005. Athens is the capital; Thessaloniki, Patras, Heraklion, Larissa, Volos, Ioannina, Kavala, Rhodes and Serres are some of the country's other major cities.
Economy After World War II, Greece experienced the "Greek economic miracle"; GDP growth averaged 7% between 1950 and 1973. Since then Greece has implemented of a number of structural and fiscal reforms while receiving considerable European Union funding. In 2001, Greece joined the Economic and Monetary Union. Annual growth of Greek GDP has surpassed the respective levels of most of its EU partners. Today, the service industry makes up the largest, most vital and fastest-growing sector of the Greek economy, followed by industry and agriculture. The tourism industry is a major source of foreign exchange earnings and revenue accounting for 15% of Greece’s total GDP and employing ,directly or indirectly, 16.5% of the total workforce.
Greece is a leading investor in all of her Balkan neighbors with the National Bank of Greece in 2006 acquiring the 46% of Turkish Finansbank and 99.44% of Serbia's Vojvođanska Bank. The manufacturing sector accounts for about 13% of GDP with the food industry leading in growth, profit and export potential. The public sector accounts for about 40% of GDP, with the government however taking measures to decrease it further. High-technology equipment production, especially for telecommunications, is also a fast-growing sector. Other important areas include textiles, building materials, machinery, transport equipment, and electrical appliances. At 10% of GDP, construction is one of the main pillars of the economy, with the sector experiencing a boom due to the Athens Olympics of 2004. Agriculture, at 7%, is the final important sector of Greek economic activity.
Greece is a member state of the European Union and part of the Eurozone.
The Greek labor force totals 4.9 million, and it is the second most industrious between OECD countries, after South Korea. The Groningen Growth & Development Centre has published a poll revealing that between 1995 - 2005, Greece was the country with the largest work/hour ratio among European nations; Greeks worked an average of 1,900 hours per year, followed by the Spanish (average of 1,800 hours/year). In 2007, the average worker made around 20 dollars, similar to Spain and slightly more than half of average U.S. hourly income. Immigrants make up nearly one-fifth of the work force, occupied mainly in agricultural and construction work.
Greece's purchasing power-adjusted GDP per capita is the world's 28th highest. According to the International Monetary Fund it has an estimated average per capita income of $35,166 for the year 2007, comparable to that of Germany, France or Italy and approximately equal to the EU average. Greece ranks 24th in the 2006 HDI, 22nd on The Economist's 2005 world-wide quality-of-life index. According to a survey by the Economist, the cost of living in Athens is close to 90% of the costs in New York; in rural regions it is lower.
An important percentage of Greece's income comes from tourism. In 2007, Greece welcomed more than 19 million tourists, and climbed to the top ten tourist destinations worldwide. The island of Rhodes was announced the best European tourist destination. Other known tourist sites are the capital Athens, the Ionian island Kerkyra and the island resort of Myconos.
Greece Income Taxes and Tax Laws Income Tax for an Individual
  1. An individual in Greece is liable for tax on his income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident" of Greece, tax will be calculated on his income earned in Greece and overseas
  2. foreign resident who is employed in Greece pays tax only on his income in Greece
  3. To be considered a Greek resident, life must be shown to be centered in Greece. Residence must be established in Greece and not in another country. The family should be domiciled in Greece and Greece should be the place in which children are educated and more
  4. An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance due from a salaried worker
  5. A self-employed individual is obligated to make advance payments on income tax that will be offset on filing an annual report. In the case of a new business, the advance payments will be calculated according to the estimates of the owner of the business. The advance payments are payable three times a year
  6. Certain payments are deducted from taxable income as detailed below
  7. Greece individual income tax rates 2008
Tax % Tax base (€)
51 - 10,500
1510,501 - 12,000
2712,001 - 30,000
3730,001 - 75,000
4075,001 and over
For salary and pension income the first EUR 12,000 are tax exempt.
Corporate Tax
  1. Corporations in Greece are taxed on their income in Greece and from overseas. Foreign companies in Greece are taxed only on income that is generated in Greece
Capital Gains
  1. For a company, a capital gain in Greece is added to regular income and is taxable at the same rate as regular income for a company, other than in specific instances as defined in law. For individuals the capital gain tax is 0%-20%
  2. A sale of goodwill or sale of business as a whole, is taxed at 20% for companies and individuals
  3. A capital gain from the sale of shares traded on Stock Exchange is, in most cases, tax exempt for individuals
  4. For individuals, rental income is taxed at the standard rates. There are deductions of 10%-15% for maintenace, 15% for documented expenses, and a 10% deduction for depreciation
Reporting dates and Payment The tax year in Greece is the year ending on December 31. Advance payments of tax are made as specified below:
  1. An Individual - An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the tax authority every month
  2. The return must be filed by March 2nd after the end of the tax year
  3. During the course of the year, the company must make advance payments every three months. A delay in submitting the returns beyond the prescribed date is liable to a fine
Deduction of Tax at Source Taxation of Employee An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security.
Social Security
  1. The employer's contribution is 28.06% of the salary. The employee's contribution is 16%
  2. A self-employed person makes payments to social security himself
  3. The insurance covers pension, unemployment and care insurance
Other deductions Tax must be deducted at source from the following payments to non-residents on the basis of the following:
  1. Dividend - 0%
  2. Interest - 25%
  3. Royalties -20%

Comment: Deduction at source for foreign residents is subject to the Double Taxation Prevention Treaty.
Personal Deductions
  1. 20% credit on a mortgage for the first residential apartment, up to a limit
  2. 20% of the rent paid on the main residential apartment up to maximum
  3. Donations to public, religious and other institutions
  4. Compulsory payments to social security
  5. EUR 1,000 tax credit for each of the first 2 dependent children
  6. 20% of alimony payment, up to a limit
  7. 20% of medical expenses, up to a limit
Business Deductions In Greece, deductions and business expenses may be claimed as specified below:
  1. Offset of losses - A loss may be offset over 5 years. Tax may not be offset in retrospect
  2. Consolidated Statements - in Greece a loss in one company of a group may not be set against a profit in another company in the group
  3. Financing expenses - as a general rule, interest on credit is allowable for tax
  4. Transfer charges - transactions between affiliated parties will be allowed only if they are consistent with the accepted market price of the transaction had the transaction been conducted between two parties that are not affiliated
Depreciation of Fixed Assets The straight-line method is the accepted method of depreciation in Greece. In certain cases the declining balance method is allowed. The rates of depreciation in Greece:
Class of Asset Depreciation %
Commercial / residential buildings5-8
Industrial buildings8
Machinery and equipment15
Computers30
Trucks and buses20
Other vehicles15
Office furniture and equipment20

When the purchase price is up to EUR 1,200, fixed assets can be fully depreciated in the first year.
Value Added Tax
  1. In most cases, VAT in Greece is 19%.
  2. There is a reduced rate of 9% that applies, in the main, to food, medicines. The V.A.T rate for books and newspapers is 4.5%
  3. In specific areas in Greece, there is a reduction on the above rate of VAT
  4. VAT is charged on assets and services provided in Greece as well as on imports into Greece
  5. In many cases, exports are not subject to value added tax. Similarly insurance services, educational services, legal services, medical services and more are exempt from VAT
  6. The threshold for VAT registration is an annual turnover of EUR 10,000
Real Estate Transfer Tax
  1. A real estate transfer tax is payable in Greece on the sale of real estate, if bought before 01/01/2006
  2. The rate of tax fluctuates between 9%-11% depending on the value and location of the property
  3. The tax is paid by the purchaser
Real Estate Tax
  1. Real estate owners are taxed in Greece on the real estate that they own. The tax is applicable to individuals and to companies
  2. Real estate that is valued at less than EUR 243,600 is exempt from real estate tax
  3. The rate of tax for real estate with a value in excess of the limit for exemptions, fluctuates between 0.35%-0.94% for individuals, 0.1%-0.6% for legal entities
Inheritance and Gift Tax
  1. Inheritances / gifts are taxable in Greece
  2. The tax is payable on real estate in Greece and real estate outside Greece that is owned by a Greek resident
  3. The rate of tax is between 0% - 40%. The amount of tax is affected by the relationship between the person making the gift / the testator, and the recipient of the gift / the heir
Greece Company formation and Registration Types of Corporations In Greece, the following forms of incorporation are accepted:
A company limited by shares (with the suffix A.E.)
  1. At least two shareholders are needed to form a company
  2. The shareholders may be individuals who are Greeks or foreign residents, or a limited company
  3. The liability of the owners of the company is limited to the sum of capital invested
  4. The basic minimum capital may not be less than EUR 60,000, fully paid up, with a nominal value of EUR 0.30-EUR 100 per share
  5. The company is managed by a board of directors
  6. A general meeting of the shareholders must be held within 6 months of the end of the tax year to approve the financial statements
A company limited by liability (with the suffix E.P.E.)
  1. The company may be managed by a single director or by a number of directors
  2. The shareholders' liability is limited to the sum of capital invested
  3. The basic minimum capital will not be less than EUR 18,000, with a minimum of EUR 30 per share
  4. A general meeting of the shareholders must be held within 6 months of the end of the tax year to approve the financial statements
Branches
  1. Foreign companies can open a branch in Greece
  2. The branch must have a same minimum share capital as required for local Greek companies
Double Taxation Prevention Treaties Greece is a signatory to a Treaty for the Prevention of Double Taxation with many countries all over the world.
Draft agreements with additional countries are at the discussion stages. A Double Taxation Prevention Treaty, in principle, enables offsetting tax paid in one of 2 countries against the tax payable in the other, in this way preventing double taxation.
Another important factor is the grant of an exemption or tax at a reduced rate on certain receipts such as interest, royalties, dividends, capital gains and others that are connected with a transaction carried out between parties associated with the Double Taxation Prevention Treaty.
When certain income is taxable under the Greek Income Tax Ordinance but there is an exemption (reduced tax) under any Taxation Treaty, the income is taxed, if at all, but only according to the provisions of the Taxation Treaty.
The information contained in this Site has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this newsletter. AlfaZeda Associates Limited would be pleased to advise readers on how to apply the principles set out in this newsletter to their specific circumstances. AlfaZeda Associates Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this newsletter.
Το περιεχόμενο δεν είναι ακόμη διαθέσιμο !
The information contained in this Site has been written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this newsletter. AlfaZeda Associates Limited would be pleased to advise readers on how to apply the principles set out in this newsletter to their specific circumstances. AlfaZeda Associates Limited accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this newsletter.