What is the Tax Rate in Greece?

Whether you are a non-resident or a resident in Greece, and you would like to initiate a financial transaction, it is crucial that you familiarize yourself with how local taxation works.

Greece uses a progressive income tax system, meaning that different portions of your income are taxed at different rates. In other words, the more you earn, the higher the tax rate you pay on the extra income. This applies if you are earning income as an employee, or if you are registered as a sole trader or freelancer. On the other hand, if you have opened a legal entity with a corporate structure, like an LLC (also known as "IKE" in Greek), then your company will have a flat tax rate of 22%, regardless of the revenue generated.

The local tax system is divided into "bands" or brackets. Each band covers a specific range of income, and each band has its own tax rate.

Understanding the Different Tax Bands

Each taxpayer’s income is divided into chunks that correspond to these bands.

For example:

• The first portion of income is taxed at the lowest rate.
• The next portion of income is taxed at a higher rate.
• The final portion (the highest income) is taxed at the highest rate.

Instead of applying one tax rate to your entire income, each part of your income is taxed separately depending on which tax band it falls into. See the table below for a visual demonstration.

Let's say there are three tax bands:

• Band 1: 9% tax on income up to €10,000.
• Band 2: 22% tax on income between €10,001 and €20,000.
• Band 3: 28% tax on income above €20,000.

If someone earns, for example, €30,000 a year, the first €10,000 will be taxed at 9%, the next €10,000 at 22%, and the remaining €10,000 at 28%.

Deductions and Tax Credits

In addition to the basic income tax, there are deductions and tax credits that can reduce the amount of tax you owe.

Common deductions include:

• For sole trader businesses or freelancers, declaring business expenses (like phone bills, internet, office supplies, etc.).
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• Foreigners may qualify for tax incentive programs that reduce their tax by a percentage, depending on eligibility. For this, please read our guide to check if you are eligible for the 50% tax reduction program. Please note that you must either be employed by a Greek company, or intend to start your freelancing business in Greece.

Other Types of Taxes

In Greece, individuals are taxed based on their purchases, or the profit they make when selling certain assets, such as property or investments.

Tax For Vehicles

When foreigners or foreign residents buy a car in Greece, they are generally subject to VAT, registration taxes, and road taxes.

Here are the main costs:

• The standard VAT rate for cars in Greece is 24% of the vehicle's price (for new cars). VAT is usually included in the sale price for new cars, but if you’re importing a car, it will be calculated separately.

• Road Tax: This is an annual tax required to keep your car on the road in Greece. It is based on the engine size and CO₂ emissions of the vehicle. For older vehicles, it's calculated by engine size, and for newer vehicles, it's based on CO₂ emissions. Road tax can range from around €100 to over €1,000 per year, depending on the vehicle.

Tax For Property

• Property Transfer Tax (PTT): This is the main tax when buying a property in Greece. As of 2024, the Property Transfer Tax rate is 3% of the property’s objective value (officially determined value for tax purposes) or the purchase price, whichever is higher.
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• VAT on New Properties: If you are buying a newly built property (with a building permit issued after 2006), a 24% VAT is charged instead of the 3% Property Transfer Tax. However, in many cases, new properties in Greece have had VAT suspended until the end of 2024, meaning they may still be subject to the 3% Property Transfer Tax.
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• Uniform Real Estate Property Tax (ENFIA): This tax is imposed on real estate properties located within Greece on a yearly basis. To learn more about what ENFIA is, and how it works, please read What is ENFIA? Property Taxes in Greece Debunked.

Capital Gains Tax

Investors and retirees can benefit from a 0% capital gains tax, which means that profits from the sale of investments are not subject to taxation.

Dividend Tax

Dividends earned from investments are taxed at a low rate of 5%, providing an additional incentive for those looking to invest their savings.

Insurance and Social Security

Foreign residents in Greece must pay a small portion of their income to the national insurance fund, "EFKA", in order to cover their basic healthcare needs. For more information, please read our guide about how EFKA works.