Greece’s tax system can be opaque to foreigners: when do you start paying income tax, what is solidarity tax, and which ones are being phased out? Find out in my rundown of what you could pay in Greece.
Personal tax on income prior to 2020
In countries such as the UK, there are tax thresholds and you don’t pay tax on a proportion of your income. This wasn’t, and isn’t, the case in Greece. You are subject to tax from the very first euro you earn. Here’s a summary of tax on personal income in Greece.
If you earn between one and twenty thousand euros, you pay 22 per cent of that in tax. If you are working this is deducted by your employer. You then pay 29 per cent on incomes up to 30,000 and if you earn between 39 and 40,000 euros you are taxed at 37 per cent. The highest tax bracket is for those earning 40,001 euros and over and is 45 per cent.
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The New Democracy government, which came to power in July 2019, plans to overhaul the tax system so that lower income and middle-income workers pay less. My middle-income friends used to say that they were working to pay their taxes [both direct and indirect e.g. VAT].
The government plans to introduce tax brackets which allow workers to earn their first few thousand euros free of tax.
If you are self-employed, you are required to pay tax in advance, and these payments will be offset when you submit your annual income report.
You will need to employ an accountant so that you can claim appropriate allowances.
Find out how you can still move after Brexit in our free guide.
The Greek tax year is the same as the calendar year, going from January 1st to December 31st.
An employer will deduct social security payments from your earnings at source. You will pay 16 per cent of your earnings and your employer will contribute 25 per cent of your salary. These contributions cover your pension contributions, unemployment benefits and health care insurance.
Value Added Tax [vat] is 24 per cent, standard. The government is preparing to lower VAT though, at least on some items. There is a tariff of 13 per cent on some food items, including non-alcoholic drinks. You should see this rate on your restaurant and hotel bills. Printed materials, some books, newspapers and periodicals have a 6 per cent VAT charge, as does electricity and gas.
Single property tax [ENFIA]
One of the first taxes to be cut by the government was single property tax [ENFIA] for residential properties with an objective value of less than 60,000 euros. This tax will fall further in 2021. By 2022, all residential property owners will see a tax reduction.
One of the first taxes to be cut by the government was single property tax [ENFIA] for residential properties with an objective value of less than 60,000 euros.
The government says that it is committed to making property taxes fairer. These changes, as well as others scheduled by the government, will make Greece a more desirable expat haven.
Taxed in Greece or the UK
If you live in Greece but pay taxes in the UK, you can sometimes now  choose where to pay your taxes, although you should realise that if you work in Greece, you will be subject to Greek tax laws. You can choose to be taxed in either country on property in the UK, and UK earnings. You will need to consult a tax expert before you make your decision.
If you have 250,000 euros to invest in Greece you can get on the Golden Visa programme, which gives you residency. So, if you buy a Greek residential property for that amount [or more] you should get automatic residency and the rights that go along with that. However, the popularity of this program has caused delays in the issuing of these visas.
Find out more about financing your dream home in Greece in our updated guide, How to Pay for It.
A ‘Solidarity Tax’ is deducted from individuals who earn more than 12,000 euros a year. The rate for this is 2.2 per cent. The highest rate is 10 per cent and is applied to those who earn more than 220,000 euros a year. The new government says that this will change ‘soon’. This tax was a way to amass revenue during the economic crisis, but as this is deemed to be over, presumably this tax will be scrapped.
In September 2019, Mitsotakis briefly outlined changes to the Greek tax system while speaking in Thessaloniki. If he is to be believed, and so far Greeks have no reason to doubt him, everyone will benefit, especially those in the lower and middle pay brackets.
If you have been delaying a move to Greece because of the tax situation, be reassured. Greece is a wonderful place to live and everyday life is improving. Just think of the fresh, healthy food, cheap olive oil and wine to wash it down with. Then, of course, there is the weather. Do you need any more reasons to relocate to Greece?
The Property Buyer’s Guide to Currency will help you: