Greece

1.1.2.1. Standard tax reliefs

• Social security contributions: all compulsory social security contributions and optional contributions to legally constituted funds are fully deductible from taxable gross income.

1.1.2.2. Deductions from the payable amount of tax, as calculated on the basis of the scale (Non-Standard tax credits):

1. The tax arising by the tax scale for employees and pensioners is reduced as following:

   • by EUR 1 900 for annual income up to EUR 20 000, for taxpayers with no dependent children

   • by EUR 1 950 for annual income up to EUR 20 000 for taxpayers with one dependent child

   • by EUR 2 000 for annual income up to EUR 20 000 for taxpayers with two dependent children

   • by EUR 2 100 for annual income up to EUR 20 000 for taxpayers with 3 dependent children or more;

   • for income exceeding EUR 20 000, the above mentioned tax credit is being reduced by EUR 10 for every EUR 1 000 of taxable income

2. The following tax credits are deducted from the payable amount of tax, as calculated on the basis of the scale after applying the above tax allowance:

   • 10% of the expenses of medical and hospital care of the taxpayer and his/her dependents provided they are not covered by Social Security Funds and they exceed 5% of the taxable income. The total credit cannot exceed EUR 3 000.

   • 10% of the expenses of medical and hospital care of the taxpayer and his dependents, provided they are not covered by Social Security Funds and they exceed 5% of the taxable income. The total credit cannot exceed EUR 3 000. Hospital expenses in respect of unmarried or widowed children who suffer from an incurable disease, who are mentally retarded or are blind and whose total annual income does not exceed EUR 6 000 are also included.

3. The amount of tax derived on the basis of all scales is reduced by EUR 200 for the taxpayer himself as well as for each dependent member, provided that the taxpayer or his dependents are handicapped (over 67%) or handicapped soldiers or military personnel injured in the course of their duties or war victims or victims of terrorist attacksor in case they receive pension by the State as war victims or as handicapped.

Note: Taxpayers who reside abroad but derive taxable income from sources in Greece are not eligible for these deductions, with the exemptions of residents of the EU Member States who derive at least 90% of their total income from sources in Greece.

Spouses:

When the wife derives income taxable on the basis of the scale, then the following are deducted from her own payable amount of tax:

1. deductions related to medical and hospital expenses, donations and the lump sum of EUR 200 of the spouse;

2. deductions related to medical and hospital expenses of the spouse’s children from a former marriage, her children born out of wedlock, her parents and orphaned relatives of first and second degree of kin.

If from the joint tax return submitted the wife has no income declared then the sum of her deductions (medical and hospital expenses, lump sum of EUR 200) is attributed to the payable tax of the other spouse.

1.1.2.3. Exemptions

Some forms of income, specified by Law are exempt from the tax.

Examples:

• on condition of reciprocity, income of all kinds derived abroad by foreign ambassadors and diplomatic representatives, consulate agents and employees of embassies and consulates that have the nationality of the represented State as well as by individuals working in the EU Institutions or other International Organizations;

• alimony received by the beneficiary according to the Court adjudication or notary Document;

• all forms of pensions and relief provided to war victims and their families, as well as to soldiers and military personnel injured in the course of their duties in times of peace;

• benefits and similar allowances provided to special categories of handicapped people;

• salaries, pensions etc. paid to handicapped people (over 80%);

• unemployment benefits granted by the National Employment Organisation (OAED)  provided that the total annual income of the beneficiary does not exceed the amount of EUR 10 000;

• the social solidarity benefit (E.K.A.S.) of pensioners;

• financial aid to recognized political refugees, to people residing temporarily in Greece for humanitarian reasons and to persons that have submitted the relevant application to the competent Greek authorities, paid by bodies carrying out refugee aid schemes financed by the UN and the EU;

• the benefit for hazardous labor provided to employees working in the armed forces, the police, the fire and port departments as well as the special allowance to medical, nursing and ambulance staff up to 65%;

1.1.2.4. Tax calculation

Taxable income is derived from the following sources:

1. Income from employment and pensions

2. Income from business activities, which also includes income from self-employed

3. Income from agricultural activities as

4. Rental Income

5. Investment Income which includes income from dividends, interests and loyalties and

6. Income from capital gains, which includes income deriving on transfer of real estate or securities.

Net income is computed separately within each category with tax rules that vary across income categoriesIf the declared income is not accepted as the base for the tax assessment, the tax authorities can base the assessment on the presumptive income, which is the minimum amount of income required to cover the taxpayer’s main living expenses.

Employment income is subject to withholding tax. The tax is withheld by the employer and is calculated by applying the taxpayer’s progressive income tax schedule. The employer calculates the withholding tax on the basis of the taxpayer’s annual net salary (net of social security contributions). The withholding tax is then reduced by 1.5% of the total amount of taxes due. The resulting tax is the annual tax due, 1/14 of which constitutes the monthly withholding tax for the private sector’s employees (every employee in the private sector receives 14 monthly salaries per year, i.e. 12 monthly wages plus 1 salary as Christmas bonus, ½ salary as Easter bonus and ½ salary as summer vacation bonus). For the employees of the public sector, the monthly withholding tax is calculated as 1/12 of the annual tax due, because of the fact that bonuses in the public sector have been eliminated. If the taxpayer’s final tax liability (derived from the annual declared income) exceeds the aggregate of the amounts already withheld or prepaid, the remaining tax is generally payable in three equal bimonthly instalments. Any excess tax paid or withheld will be refunded.