Taxation in Greece

Taxation in Greece is similar to most other developed nations, being based around two systems, direct and indirect taxation.

Income Tax

All Income Tax in Greece is progressive. 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. 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. Income tax brackets in Greece range from 5% (up to 11,000 euros), to 40% (for incomes of 23,000 euros and over).

ocial Security Tax

An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security as in many other EU member states. The employer's contribution amounts to 28.06% of the salary. The employee's contribution is 16%.

Tax Exemptions

There are several cases of Tax exemptions under the Greek taxation system, these are as follows:

*Proceeds from the sale of shares that are traded on the Athens Stock Exchange.
*Income from ships and shipping.
*A dividend received from a Greek company.
*Capital gain from sale of a business between family members, as defind by law.

Tax Deductions

The examples of Tax deductibility in Greece are, as with most other features of Greek taxation, similar to that of other Western European and North American nations, that is, tax deductibility for things such as charity and other things as shown below:

*15% credit on a mortgage for the first residential apartment.
*15% of the rent paid on the main residential apartment up to maximum.
*Donations to public, religious and other institutions.
*Compulsory payments to social security.

Business Deductions

Corporation Tax

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.

Beginning in 2007, the rate of corporate tax is 25%.

Capital Gains Tax

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.

Withholding Tax

Greece does not impose withholding tax on corporate dividends paid to foreign investors. It does impose withholding tax on interest and royalties. The rate of tax may be affected by income tax treaties.

VAT

The VAT tax in Greece is from 4,5% to 19% .For all the goods not belong to any special category the VAT is 19% .For category 1 goods the VAT is 9% and for category 2 goods is 4,5%. On some islands there is a reduction for category 1 goods VAT to 13% .

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