Greece charges a number of taxes and levies that impact on exporters and investors, including the following:
- Income taxes – the company rate is 40 per cent, with some businesses (eg. joint ventures) at 35 per cent. A further three per cent is charged on lease income, and there are other small charges on stock exchange and mutual fund payments. Proper accounts must be kept, otherwise there is scope for deemed income to be taxed. Individuals and residents pay income tax based on income and income-producing assets (with generous deductions) on a sliding scale from zero per cent to 45 per cent.
- Capital gains tax
- Excise (consumption) taxes are levied on a small number of products, such as gasoline, diesel fuel, spirits, beer, wine, motor vehicles, TVs etc. The excise tax rates vary depending on the product and range from 10 per cent to 150 per cent.
- Value Added Tax (VAT) – a consumption tax charged at a standard rate of 19 per cent, but necessities and certain other items are charged at a lower rate (nine per cent for foods, pharmaceuticals, and five per cent for books). reduced eight per cent rate applies to certain necessities, including food, pharmaceuticals, electricity and transportation. A reduced four per cent rate applies to books, magazines and theatre tickets. The VAT rates are reduced to 13 per cent, six per cent and three per cent respectively in the Dodecanese and Eastern Aegean island regions. Temporary imports that will be re-exported are not subject to VAT. The base on which VAT is charged is the CIF value at the port of entry, plus any duty, excise taxes, levies and other charges (excluding VAT) collected by customs at the time of importation.
- Inheritance and gift tax – rate varies according to recipient, by value.
- Real estate transfer taxes – charged at nine per cent to 11 per cent, higher in some parts of the country, when real estate ownership changes.
- Taxes on ships and cars – Greek-registered ships pay a levy but are exempted from income tax, while cars attract a tax based on engine size.
The parliament has exclusive right to set and collect taxes. The tax year is usually the calendar year, although exceptions are readily granted for foreign firms. In most cases, business tax returns are due four-and-a-half months after the tax period they apply to. Payments by companies are usually made in five instalments, including about half in advance. Individual taxes are paid by employers at the time that salary is credited, by deducting the anticipated tax liability from the employees pay.
Greece has yet to tackle a number of difficult problems including updating company law, an outdated and complex tax code, a costly pension system and a rapidly ageing population, which could cause serious fiscal pressures if not addressed.
Import duty on products from non-European Union (EU) countries (including the USA) ranges from five per cent to seven per cent for most manufactured products. Duties are lower on most raw materials and higher on some products, such as textiles. Imports are also subject to other minor surcharges totalling less than one per cent.
Temporary duty relief can be granted for raw materials imported for processing and reexportation to non-EU countries. Approval is granted on an ad hoc basis if:
- No similar or substitute products are produced in the EU.
- There is a considerable price difference between domestically produced and imported raw materials from non-EU countries.
- A special quality material is required and is not available in the EU or is produced in insufficient quantities.
- The foreign purchaser requires a special finished product.
Customs authorities collect import duties only for the amount of raw material not accounted for in the finished goods being re-exported. Import duties on raw materials are collected at the time of importation if the finished product is intended for distribution in the domestic market or another EU member country.
A charge of 0.65 per cent of the CIF value is collected by Greek customs for the University of Thrace (N. Greece) and the Bank of Greece. It is levied on non-agricultural imports from non-EU countries.
Greek film production is subsidised by a 12 per cent admissions tax on all motion pictures. Enforcement of Greek laws protecting intellectual property rights for film, software, music and books is problematic, but has improved in the last few years.
Trade between EU members is duty free.