Greece is both an EU member state and a Schengen Area country. Since the introduction of the 250,000 Euro property investment immigration policy, it has immediately attracted the attention of many domestic investors. However, before making plans for investment immigration to Greece, it is recommended to first understand the Greek tax system. Whether you are purchasing immigration property, submitting an immigration application, or living in Greece after your application has been successfully approved, you will have to deal with various taxes. If you do not understand the Greek tax system, you will certainly encounter many detours. Below, let us learn about the main types of taxes in Greece!
Social Security Tax
Like most EU member states, employers in Greece are required to withhold taxes from employees and contribute a portion themselves to pay for social security tax. The employer's contribution is 28.06% of the salary, and the employee's contribution is 16%.
Tax Exemptions
Greece provides tax exemptions for the following income:
· Gains from stocks traded on the Athens Stock Exchange
· Income from ships and shipping operations
· Dividends received from Greek companies
· Capital gains from asset transfers between family members as stipulated by law
Tax Reductions
Greece provides tax reductions for the following:
· 15% tax reduction on mortgage interest for a primary residence
· Up to 15% reduction on rental tax for a primary residence
· Donations to public utilities, religious organizations, and other entities
· Mandatory social security tax contributions
Corporate Tax
Foreign companies are only taxed on profits earned within Greece.
At the beginning of 2007, the corporate income tax rate was 25%. Starting from 2010, the corporate income tax rate decreased by 1% annually, reaching 20% by 2015.
Capital Gains Tax
Unless otherwise specified by law, capital gains in Greece are taxed uniformly as corporate income.
Withholding Tax
Since January 2009, Greece has imposed a 10% withholding tax on corporate dividends, unless the dividends are subject to the EU Parent-Subsidiary Directive or qualify for a lower tax rate under a bilateral tax treaty.
Withholding tax also applies to interest and royalties, unless reduced or exempted by a bilateral tax treaty, or if the fees are subject to the EU Interest and Royalties Directive.
Value Added Tax (VAT)
The VAT rate in Greece ranges from 4.5% to 23%. The VAT for goods not belonging to any special category is 23%. The VAT for Category 1 goods is 13%, and the VAT for Category 2 goods is 4.5%. On some Greek islands, the VAT for Category 1 goods can be reduced to 13%.