Corporate Income Tax
Income Tax Rate
- Up to € 20,000: 22%
- Next € 10,000: 29%
- Next € 10,000: 37%
- Above € 40,000: 45%
Liabilities for Greek income tax (and certain other taxes) depend on where you’re domiciled.
The domicile is normally the country regarded as permanent home and where a person lives most of the year. For example, a foreigner working in Greece for a Greek company who has taken up residence in Greece and has no income tax liability abroad, is considered to have his tax domicile in Greece.
The country of domicile is particularly important when it comes to inheritance tax. A person is considered to be a Greek resident and liable to Greek tax if any of the following apply:
- His/her permanent home, i.e. family or principal residence, is in Greece.
- He/she spend over 183 days in Greece during any calendar year.
- He/she is employed or carry out paid professional activities in Greece, except when secondary to business activities conducted in another country.
- His/her centre of vital economic interest, e.g. investments or business, is in Greece.
- Dividends 10%;
- Interests 15%;
- Royalties and other payments 20%.
Time to prepare and Pay Taxes
Employers Social Security and statutory contributions
Employer Social Security is 13.33% on gross salary.
Employees Social Security and statutory contributions
Employee Social security is 6.67%.
In 2014, Greece made paying taxes more costly for companies by increasing the corporate income tax rate; though it also reduced the employers’ contribution rate to the social security fund.
In 2016, however, Greece made paying taxes less costly for companies by reducing the rates for social security contributions paid by employers, making insurance premiums fully tax deductible and lowering property tax rates. At the same time, it defined entertainment expenses as nondeductible, reduced the depreciation rates for some types of fixed assets and increased the tax on interest income.
Until May of 2019 there is an additional 3.5% each imposed as a supplement.
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Greece. Under Greece Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
Local Payroll Administration
In some cases, a company will register their business in Greece under one of the forms available: General/Limited Partnerships, EPE, AE or IKE but prefer to have another company administering its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Larger companies with a commitment to Greece may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Greek payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Irish employment laws.