Tax & Residency Guide in Greece

Tax Guide for Greece

Greece is known for its rich history, stunning landscapes, and vibrant culture. However, when it comes to taxes, navigating the system can be challenging for residents and non-residents alike. Understanding the Greek tax system, residency triggers, filing requirements, rates, and deductions is crucial to ensure compliance and maximise your tax efficiency. In this guide, we will provide a comprehensive overview of the tax system in Greece and offer valuable insights into managing your tax obligations effectively.

### Residency Triggers

In Greece, the determination of tax residency is based on the number of days an individual spends in the country. According to Greek tax law, an individual is considered a tax resident if they spend more than 183 days in Greece in a calendar year. Additionally, if an individual has their primary residence or the centre of their vital interests in Greece, they may also be considered a tax resident, regardless of the number of days spent in the country.

### Tax System Type

Greece operates a worldwide income tax system for its residents, meaning that residents are taxed on their global income regardless of where it is earned. Non-residents, on the other hand, are only taxed on income generated in Greece.

### Tax Treaties

Greece has tax treaties with numerous countries to prevent double taxation and promote international cooperation. These treaties determine which country has the primary right to tax specific types of income. It is essential to consult these treaties to understand your tax obligations and entitlements when earning income from different jurisdictions.

### Entity Options

When doing business in Greece, individuals can choose from various entity options, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each type of entity has different tax implications, legal obligations, and liability structures. It is advisable to seek professional advice to determine the most suitable entity structure for your business activities in Greece.

### Filing Requirements

Individuals and entities in Greece are required to file an annual tax return to report their income and calculate their tax liability. The tax year in Greece follows the calendar year, with tax returns typically due by the end of March following the end of the tax year. Failure to file a tax return or pay taxes on time may result in penalties and interest charges.

### Tax Rates

Greece has a progressive tax system with tax rates ranging from 9% to 44% for individuals. The tax rates vary depending on the type of income, with different rates applying to employment income, business income, capital gains, and dividends. It is important to note that tax rates and thresholds may change annually, so it is advisable to consult the latest tax regulations when calculating your tax liability.

### Deductions

Greece allows various deductions and credits to reduce taxable income and lower the overall tax liability. Common deductions include contributions to social security schemes, medical expenses, charitable donations, and education expenses. Understanding the available deductions and keeping accurate records of eligible expenses can help maximise tax savings.

### When to Hire an Advisor

Navigating the Greek tax system can be complex, especially for expatriates, entrepreneurs, and individuals with multiple income sources. Hiring a qualified tax advisor or accountant can provide valuable assistance in understanding your tax obligations, structuring your affairs efficiently, and maximising tax savings. An advisor can also help you stay compliant with tax laws, avoid penalties, and mitigate tax risks.

### Country-Specific Strategies

When managing your taxes in Greece, it is essential to consider country-specific strategies to optimise your tax position. These strategies may include structuring your investments, leveraging available tax incentives, and planning your income streams to minimise tax liabilities. Additionally, staying informed about changes in tax laws and seeking professional advice can help you adapt your tax strategy to new developments.

In conclusion, understanding the Greek tax system, residency triggers, filing requirements, rates, deductions, and country-specific strategies is essential for individuals and businesses operating in Greece. By staying informed, seeking professional advice when needed, and proactively managing your tax affairs, you can ensure compliance, maximise tax savings, and achieve your financial goals in Greece.