Tax in Greece - boring but important

I don’t pretend to be a tax expert but recently I had a long and quite detailed talk to a tax expert about taxation in Greece. I am going to give you an outline of this very important aspect of your Greek financial planning. Remember that the UK has a double taxation indemnity agreement with Greece so you will not be asked to pay tax on the same earnings in both counties.

Firstly:

Tax residents in Greece are liable to pay Greek tax on their worldwide income,

whereas Non tax residents in Greece are liable to pay tax only on their Greek sourced income.

Tax residency:

Residence is determined on the basis of factual circumstances such as:

• The length of stay in Greece


• The possession of a residence permit

Taxable income includes:

• Income from employment,


• Income from a business


• Professional income


• Investment income


• Pension income (under certain conditions),


• Benefits in kind

Married persons file a tax return jointly, but some modifications are applicable as per the family unit conditions.

As in most countries, taxation regulations can change from time to time, but here are some of the deductions that are permissible for 2010:

• Social security contributions in full


• Life insurance premiums up to EUR 1’200 for both spouses in total,


• Interest payments on mortgages signed up to 31 December 2002 are fully deductible but only for one principle home in the taxpayer’s lifetime, if the home is no bigger than 120m2, if bigger the deductible interest is reduced proportionally


• Under certain circumstances, a tax credit is applicable for interest payments on mortgage loans taken after December 2002


• Certain cash donations to institutions and charities

Tax credits for 2010:

• 20% of the annual medical expenses of the taxpayer and his dependents up to a maximum of EUR 6’000


• 20% of the annual home rent up to a maximum of EUR 240,


• 20% of the annual rent paid in respect of dependent children who are studying at a Greek school or university up to a maximum of EUR 240,


• 20% of the educational expense for a taxpayer and his dependents up to a maximum of EUR 240,


• Under certain circumstances, a tax credit is applicable for interest payments on mortgage loans taken after December 2002


• 20% of the expenses for converting an oil heating system to natural gas or solar power or for the purchase of power generating systems using renewable energy sources up to a maximum of EUR 700,


• 20% of alimony payments up to EUR 600

Income tax rates for 2010:

• 0.00% for the first EUR 12’000, (submit receipts to qualify for the tax exemptions),


• 18.00% from EUR 12'000 to EUR 16'000,


• 24.00% from EUR 16'001 to EUR 22'000,


• 26.00% from EUR 22'001 to EUR 26'000,


• 32.00% from EUR 26'001 to EUR 32'000,


• 36.00% from EUR 32'001 to EUR 40'000,


• 38.00% from EUR 40'001 to EUR 60'000,


• 40.00% over EUR 60'001.

Filing date:

Between May 4th and June 1st, in the year following the tax year (for employees).

I hope that gives you a broad outline of what to expect.

Are you still planning on buying property in Greece? Times are hard I know, but with falling property prices it’s a great time to put in that cheeky offer. And of course more and more people are renting homes in Greece rather than buying their own holiday home or spending vast sums on Greek hotels… so if you are thinking of letting out your new home this could be the time to do it.

Talk next week – until then take care!

Carol

The Overseas Guides Company
http://www.greecebuyingguide.com/