Mazars in GREECE

Corporate taxes and other direct taxes

The applicable corporate income tax rate was revised to 28% from 29% for Greek businesses and foreign branches. The relative tax rate applies after the deduction of business costs, depreciations and provisions for bad debts. Major tax adjustments and non-deductible items are payments out of banking system, transfer pricing adjustments, personal consumption expenditure, bad depts without legal actions, payments to low tax rates jurisdictions (under conditions), non-paid SSC and thin cap interests to the extent that they are over 30% of EBITDA and 3M€. Losses can be carried only forward for 5 years however special limitations apply in M&A transactions. A new shareholder over 33% cannot benefit from prior years losses if the change of the share’s ownership has not been made for business purposes. The loss from a P.E in the EU can be utilized in Greece under conditions. Greek companies are also subject to annual business tax up to 1.000€, irrespective of their profitability. Finally, Greek Companies are subject to tax prepayment equals to 100% of the tax corresponding to the revenues of the tax year for which the return is filed. For newly established companies, the prepayment is reduced to 50% for the first three years of operations.

The domestic withholding tax rate for dividends distribution is 15% for both individuals and legal entities shareholders, while interest’s payment is subject to tax rate of 15% and the corresponding rate for royalties is 20%. In case a DTT is in force the above rates can be reduced according to the provisions of the Treaty. By adopting the EU Parent Subsidiary Directive, there is no withholding tax on dividends, interests and royalties paid on EU (including Greece) intragroup transactions, under conditions. Greece has a wide international treaty network with 57 treaties on the avoidance of double taxation.

Furthermore, the tax law in Germany distinguishes between partnerships and corporations. A partnership is in general liable to trade tax. The result of a partnership will be liable to income tax, if the shareholders are individuals, and to corporate income tax, if the shareholders are corporations on the level of the shareholder. The partnership itself neither pays income nor corporate income tax.

On top of the ordinary annual real estate tax (E.N.F.I.A.) generally applicable in cases of immovable property ownership, legal entities holding real estate in Greece may under certain conditions be charged furthermore with the Special Estate Tax, calculated at a rate of 15% on the value of the property in case that the beneficial owner is not known to the Greek authorities.

Capital gains from shares and immovable property are taxed as normal business profits (28%) for businesses and with a flat rate of 15% for individuals. Especially for individuals and the capital gains arising from the sale of real estate the tax 15% has been postponed until the end of 2019.

Transfer tax is applied in Greece to a limited scope of transactions. The general transfer tax rate which applies to property transactions is 3%, including acquisition of real estate. The taxable base is the contract value of the real estate unless the tax nominal value of the property is higher than the contract value and the taxable person is the buyer. Once the buyer or his spouse or his minor children have no property meeting their housing needs, applies a first-rate exemption. The exemption applies under certain conditions and refers to houses of fair value EUR 200.000 to 250.000 with some amendments and increments, depending on buyer’s marital status. The acquisition of newly built real estate falls within the scope of VAT under conditions.

Taxation of inheritances, donations and parental benefits is applying to any kind of movable and immovable property located in Greece, is assessed on the current value of the property and is divided into 3 categories, depending on the degree of relatedness between the provider and the acquirer. The relative tax rate of the first category is progressive, including spouses and children and generally the first-degree relatives, and ranges from 0% to 10%, while the tax-free amount is up to EUR 150,000. Referring to inheritance tax a special tax-free amount of 400,000 euros is provided for the surviving spouse (after 5 years of marriage) and his minor children as well. The second category includes the second-degree relatives which are subject to progressive rate from 0% to 20% while the respective tax-free amount is set to EUR 30,000. The respective tax rate of the last category is referring to the remainder relatives and foreign acquires (no relationship with the provider) ranges from 20% to 40% applying to over EUR 6.000 value acquisitions. However, besides the above provisions, direct informal parental grants or donations of funds are subject to flat tax rate of 10% for donees being classified at the first category, 20% for donees belonging to the second category and 40% correspondingly for the rest of donees, without applicable tax-free amount.

OECD regulations

In order to reduce the extent of the black economy and tax evasion and defend artificial arrangements Greece gradually incorporates in the domestic legal framework, proposed international anti-abuse and anti-avoidance clauses and adopts BEPS Actions of the Organization for Economic Cooperation and Development’s (OECD) by applying among others the European Union Directive called Multilateral Agreement of Principles for the Automatic Exchange of Financial Account Information, CbC (Country by Country) report provisions concerning the exchange of information by parent companies of large multinational groups and additionally the CFC (Controlled Foreign Companies) rules.

Following the OECD general principles and guidelines for intercompany transactions, resident enterprises that are associated with other enterprises, within the country or abroad, are liable to transfer pricing documentation. Liable companies must prepare and maintain a documentation file for the transfer pricing of their interrelated (intra-group) transactions until the end of the forth month following the closing date of the fiscal year into examination. An exemption from maintaining a transfer pricing documentation file is provided if the above transactions or transfer of operations amount to up to EUR 100,000 annually and the total turnover of the liable party does not exceed EUR 5 million annually or the above transactions or transfer of operations amount to up to EUR 200,000 annually and the total turnover of the liable party exceeds EUR 5 million annually.

The transfer pricing documentation file is mandatorily accompanied by a ‘Summarized Table of Transfer Pricing Information’, which is submitted on electronic form to the tax authorities together with the annual income tax return. The delayed, inaccurate or submission’s default incurs many penalties range from 500 to 20.000 depending the value of intra group transactions.

Tax Residency

An individual is a tax resident of Greece, provided that his permanent or principal place of residence or habitual residence or the center of his vital interests are in Greece. Furthermore, the criteria of 183 days presence in the country does also apply. For businesses, the concept of place of effective management has been incorporated in the Greek law since 2014.

Transfer pricing in Greece
Arm's length principle since 1994
Documentation liability since 2008
APA since 2014
Hyerarchy in TP methods Follows OECD TP Guidelines
- lack of documentation " For inaccuracy/incompleteness; 1‰ of TP transactions (min EUR 500-EUR 2,000) "
- tax shortage For non submission , fine of 1‰ of TP transactions (min EUR 2,500 max. EUR 10,000). Non existence of documentation file, penalty up to 20,000
Related parties 33% < Direct or indirect control or management dependence or exercise of decisive influence
Safe harbours  

Level of attention paid by Tax Authority:


VAT and other indirect taxes

are the financial Greek VAT system is in line with the EU VAT Directives. The standard rate is 24%, while the reduced rates are 13% (e.g. agricultural services, accommodation services, certain types of food) and 6% (e.g. journals, books, medicines, plays). VAT-exempted activities and banking services, insurance, medical services, education (under conditions). The options/limits based on the EU Directive are presented within VAT legislation:

Regarding to other indirect taxes, in Greece applies a flat stamp duty rate of 2,4 or 3,6% to certain transactions excluding VAT, such as rents, loans etc.

Other indirect tax types in Greece include excise duty on oil, alcohol and tobacco products, environmental protection charge on products heavily polluting the environment (e.g. all kinds of electric equipment, accumulators and batteries, packaging materials, etc.), financial transactional tax (payable by the banks completing such transactions), insurance tax. From 1/1/2017 an excise duty on coffee was introduced in Greece.

VAT options in Germany  
Distance selling EUR 35,000/year
Call-off stock No
VAT group registration No
Cash accounting Optional for small companies up to 2m turnover
Import VAT deferment
Local reverse charge sale of waste,B2B sales for laptops- tablets- cell phones under conditions
Option for taxation
letting of real estate optional on business rents
supply of used real estate No
VAT registration threshold EUR 10,000/year

Personal income tax / Social security system

Pursuant to domestic law as employment income is considered any remuneration received by an employee for services rendered per year under an employment agreement (benefits in cash or in kind are also included e.g. the private usage of a company car, the cost of living allowance, etc.). In Greece personal income tax (dependent employment, assignment fee) is subject to a progressive tax rate which ranges from 22% to 45%. There is a flat rate of 15% for dividend and interest income and a flat rate of 20% for royalties’ income. Tax payable on active incomes is reduced by a family tax allowance. Additionally, personal income is subject to special solidarity levy with a progressive scale from 2,2% to 10%.

Regarding the tax payment, by the end of the second subsequent month of the relative payment (payroll, fee etc.). the employer must pay all tax arising. The income tax for individual income is paid in three bi-monthly remits. Persons who are self-employed, freelancers, etc. are responsible for paying their own taxes and social insurance.

Active incomes fall under the scope of the SSC system. The vast majority of the Greek employees are covered by Social Insurance Institution called E.F.K.A. from 1/1/2017. The social security contributions are calculated on the actual salary of the employee. The applicable rates are 25,06% for employers and 16% for employees. The Social Security grants benefits in the case of unemployment, sickness, disability, retirement and death. For calculation purposes the upper limit of the social security contributions is €5.860,80 gross salary.

Benefits-in-kind are taxed if the total value of benefits exceeds the amount of 300 Euro per fiscal year.

For individuals a progressive tax rate from real estate income is imposed as follows: <12.000 €15%, 12.001-35.000€35%,>35.001 €45%.

2019 in Greece Minimum wage Average wage in private sector
EUR   in EUR   in EUR
Total wage cost* 733 125,06% 1 478 125,06%
Employer's social security contribution** 147 25,06% 296 25,06%
Gross salary*** 586 100% 1 182 100%
Personal income tax - 22%/29%/37%/45% 86 22%/29%/37%/45%
Special Solidarity Contribution ****   2,2%/5%/6,5%/7,5%/9%/10%   2,2%/5%/6,5%/7,5%/9%/10%
Employees' contributions 94 16,00% 189 16,00%
Net salary 492 84,00% 907 76,72%

* per payroll period (there are 14 payroll periods per year)

** most common social security contributions rate regarding usual employment capacities

*** the minimum gross salary is expected to increase up to 10% during 2019

**** applicable over 12.000 euro annual income

Office status : integrated (CARL)
Corporate name : Mazars Certified Public Accountants Business Advisors S.A.
14 Amfitheas Avenue
17564 Palaio Faliro