1. Corporate Income Tax (CIT)
The corporate income tax (CIT) rate in Greece is set at 22% for 2024, applicable to most resident companies on their worldwide income. Non-resident companies are generally taxed only on Greece-sourced income, such as profits generated from a permanent establishment (PE) within Greece.
| Corporate Tax Rate | Rate (%) | Details |
|---|---|---|
| Standard CIT Rate | 22% | Applied to resident companies on worldwide income. |
| Non-Resident Companies | 22% | Taxed only on Greek-sourced income. |
Key Compliance Factors:
- Resident Corporations: Taxed on all global income.
- Non-Resident Corporations: Only taxed on income derived from Greece. Income generated through a PE in Greece is subject to local tax.
Tax Deductions & Incentives:
- R&D Deductions: Companies investing in R&D activities may qualify for deductions.
- Green Investment Incentives: Certain energy and sustainability-related projects may benefit from reduced tax rates.
2. Individual Income Tax (PIT)
Greece’s Individual Income Tax (PIT) is progressive, with rates ranging from 9% to 44% based on annual income. Deductions are available for dependents, charitable donations, and medical expenses.
| Income Range (EUR) | Tax Rate (%) | Description |
|---|---|---|
| Up to EUR 10,000 | 9% | Base tax rate for lower income bracket |
| EUR 10,001 – EUR 20,000 | 22% | Moderate-income range |
| EUR 20,001 – EUR 30,000 | 28% | Higher income bracket |
| EUR 30,001 – EUR 40,000 | 36% | Higher income bracket |
| Over EUR 40,000 | 44% | Highest income bracket |
Key PIT Compliance:
- Deductions: Individuals may deduct expenses related to healthcare, dependents, and certain charitable contributions.
- Expatriates: Foreign nationals working in Greece for over 183 days per year are typically considered tax residents and subject to local taxation.
3. Value Added Tax (VAT)
The standard VAT rate in Greece is 24%, applying to most goods and services. However, reduced rates of 13% and 6% apply to specific essential items, such as food, pharmaceuticals, and certain medical services.
| VAT Rate | Rate (%) | Applicable Goods/Services |
|---|---|---|
| Standard VAT Rate | 24% | Most goods and services |
| Reduced Rate | 13% | Some food items, hotel accommodation, restaurants |
| Super Reduced Rate | 6% | Certain pharmaceuticals, medical services |
VAT Compliance:
- Registration: Businesses generating over EUR 10,000 annually must register for VAT.
- Filing: VAT returns are generally filed monthly or quarterly, depending on the company’s turnover.
4. Withholding Tax
Greece imposes withholding tax on specific payments made to non-residents, including dividends, royalties, and interest. These rates can vary if reduced by tax treaties.
| Income Type | Withholding Tax Rate | Notes |
|---|---|---|
| Dividends | 5% | Standard rate, potentially lower with tax treaties |
| Interest | 15% | May be reduced under specific treaties |
| Royalties | 20% | Applicable to intellectual property royalties |
5. Social Security Contributions
Social security contributions in Greece cover pensions, health insurance, and unemployment insurance. Both employers and employees contribute to these schemes, with rates dependent on the employee’s earnings.
| Contribution Type | Employer Contribution | Employee Contribution | Coverage |
|---|---|---|---|
| Pension Fund | 13.33% | 6.67% | Retirement and pension coverage |
| Health Insurance | 7.10% | 2.55% | Health benefits and services |
| Unemployment Insurance | 2.41% | 1.67% | Unemployment benefits |
Filing and Payment Deadlines: Social security contributions are generally due monthly, with deadlines falling on the last day of the month for contributions from the prior month.
6. Business Tax Incentives
Greece offers several incentives aimed at promoting business investment and sustainable growth, particularly in sectors like renewable energy, technology, and manufacturing.
| Incentive | Benefit | Details |
|---|---|---|
| R&D Tax Credits | Reduces tax liability | Tax deductions for R&D expenditures |
| Green Energy Tax Exemptions | Reduces taxable income | Businesses investing in renewable energy benefit from reduced tax rates |
| Export and Regional Incentives | Special deductions | Businesses in specific economic zones or those engaged in export activities may qualify |
7. Additional Considerations
Tax Residency:
- Corporate Tax Residency: Companies are tax-resident in Greece if they are incorporated there or have their management located within Greece.
- Individual Tax Residency: Individuals residing in Greece for over 183 days in a tax year are generally considered residents and are taxed on worldwide income.
Filing Deadlines:
- Corporate Tax Returns: Due by the last day of the sixth month after the fiscal year’s close.
- Individual Tax Returns: Due by the end of June of the following year.
Penalties for Late Filing: Late submissions may incur penalties up to 20% of the owed tax, plus interest based on the rates set by Greece’s central bank.
Final Thoughts
Understanding Greece’s tax regulations for 2024 provides essential insights for effective workforce management and compliance. Businesses that recognize both national and local tax obligations are better equipped to manage their Greek operations, especially with the support of EOR/PEO services. This strategic approach ensures alignment with Greece’s tax laws, optimizes financial planning, and enables a positive employee experience.