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| An aspect of fiscal policy |
Taxation in Greece is based on the direct and indirect systems. The total tax revenue in 2017 was €47.56 billion from which €20.62 billion came from direct taxes and €26.94 billion from indirect taxes. The total tax revenue represented 39.4% of GDP in 2017. [1] Taxes in Greece are collected by the Independent Authority for Public Revenue (Ανεξάρτητη Αρχή Δημοσίων Εσόδων).
Income taxation in Greece is progressive. Income tax is payable by all individuals earning income in Greece, regardless of citizenship or place of permanent residence. Permanent residents are taxed on their worldwide income in Greece. [2] An individual in Greece is liable for tax on their income as an employee and on income as a self-employed person. In the case of an individual who is a permanent resident of Greece, their tax owed is calculated on their income earned in Greece and overseas. An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the tax authority every month. [3] [4]
The 2014 tax rates are as follows: [5]
| Income | Taxation |
|---|---|
| €0 – €25,000 | 22% |
| €25,001 – €42,000 | 32% |
| > €42,001 | 42% |
On May 9, 2016, a new set of emergency measures were voted in the Parliament by the SYRIZA/ANEL government. [6] These changes include new income tax rates as well as new solidarity tax rates. The tax rates applicable to income earned in 2016 are as follows: [7]
| Income | Taxation |
|---|---|
| €0 – €20,000 | 22% |
| €20,001 – €30,000 | 29% |
| €30,001 – €40,000 | 37% |
| > €40,001 | 45% |
The solidarity tax rates are progressive ranging from 2.2% to 10%. They are assigned as follows: [8]
| Income | Solidarity tax rate |
|---|---|
| €0 – €12,000 | 0% |
| €12,001 – €20,000 | 2.2% |
| €20,001 – €30,000 | 5% |
| €30,001 – €40,000 | 6.5% |
| €40,001 – €65,000 | 7.5% |
| €65,001 – €220,000 | 9% |
| > €220,001 | 10% |
But as 1 January 2020 the tax rate for the solidarity contribution will have been amended as in the table below: [9]
| Income | Solidarity tax rate |
|---|---|
| €0 – €30,000 | 0% |
| €30,001 – €40,000 | 2% |
| €40,001 – €65,000 | 5% |
| €65,001 – €220,000 | 9% |
| > €220,001 | 10% |
An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security as in many other EU member states. The employer's contribution amounts to 24.56% of the salary. The employee's contribution is 15.5%. [ citation needed ]
The basic social security contributions amount to the 27.1% of total income (after VAT paid, qualified expenses deducted and before income tax paid). This number can broken down to 20.0% for public pension funding and 7.1% for the public health system.
An extra 7.0% is charged for people enlisted to added benefits public pension schemes. An extra 4.0% is charged for people enlisted to retirement bonuses public schemes. Thus the total contributions can go as high as 38.1% of income.
Income range for calculation of Social security tax is 4,923 - 70,330 EUR per year. If annual income is out of the range above, the lower/higher limits respectively will be considered for calculation.
Especially for agriculture professionals, the basic contribution of 27.1% will be lower until 2021, as follows:
Especially for doctors, pharmacists, engineers, lawyers and economists, the total contribution of 27.1-38.1% will be 5-50% lower until 31/12/2020, as follows:
Corporations in Greece are taxed on their income in Greece and from overseas. Foreign companies in Greece are taxed only on income that is generated in Greece. Also, there is 100% advance payment of the taxable amount of the current fiscal year, and is being balanced by each next fiscal year financial data.
Corporate income tax rates by year:
The corporate income tax rate is to be gradually reduced as follows: [10]
The planned reduction does not include corporate income tax rate of Greek credit institutions and Greek branches of nonresident credit institutions, which is to remain at 29%.
A capital gain in Greece is added to regular income and is taxable at the same rate as regular income for a company, other than in specific instances as defined in law.
A capital gain by an individual in Greece is taxable at the rate of 15%. There is no tax in the case of capital gain from trading in the stock market as long as the individual owns less than 0.5% of the publicly listed company. [11] [12]
As of 1 Jan 2009, Greece imposes a withholding tax of 10% on corporate dividends, unless the dividend qualifies for application of the EC Parent-Subsidiary Directive or if a lower rate applies under an applicable double tax treaty. [13] It also imposes a withholding tax on interest and royalties, however the tax rates may be reduced or eliminated by an applicable double tax treaty or if the payment qualifies for application of the EC Interest and Royalties Directive. [14] [15]
As of 13 December 2018 the withholding tax rates are as given in the table below: [16]
| Type of income | Withholding tax rate |
|---|---|
| Dividends | 10% |
| Interest | 15% |
| Royalties and other payments | 20% |
| Fees for technical projects, management fees, and consultancy and other related services | 20% |
| By exception, fees received by contractors of every kind of technical projects and lessors of public, municipal, association, or port proceeds | 3% on the value of the project under construction or lease payment |
Value added tax (VAT) was implemented in to the Greek taxation system in 1987 in order to replace turnover tax and other indirect taxes. The Greek VAT system complies with the European Union value added tax system.
The Value added tax (Φόρος Προστιθέμενης Αξίας) in Greece consists of 3 rates:
The VAT rates applied in the Aegan islands of Leros, Lesbos, Kos, Samos and Chios, are 30% lower than the corresponding rates applied in the mainland. The lower VAT rates applied in these Greek Islands are 4% (super-reduced rate), 9% (reduced rate) and 17% (standard rate). The lower VAT rates are in effect until 30.06.2019. [17]
The standard rate applies to the following categories and to the following goods and services:
The reduced rate applies to the following categories and to the following goods and services:
The super reduced rate applies to the following categories:
VAT returns are submitted on quarterly or monthly basis, depending on the type of books (single or double-entry books) kept by the VAT payer. Exempted from VAT are those taxable persons whose annual turnover (excluding VAT) is no higher than €10,000 from supply of goods or/and services. Such persons may opt to be exempt from VAT. The exemption does not apply with regard to taxable persons not established in the Greek territory. [21]
The Real property tax is levied on property, that is located in Greece. The tax composes of two parts, the main tax and the additional tax. The value of the main tax depends on the size, location, zone price, surface, age, use and other characteristics of the taxed property. The additional tax is derived from the total tax value of all the taxpayer's property and it ranges from 0.15% to 1.15% depending on the total value of the property. The additional tax is in effect, if the total value of the taxed property exceeds €250,000. [22]
The Inheritance tax is different for close relatives of the deceased and for other heirs. The former ranges from 1% to 10% of the "tax value" after the deduction of a tax-free amount, depending on the relationship of the taxpayer with the testator. For other heirs, the inheritance tax rate ranges from 0% to 40% of the tax value. [23]
There are several cases of Tax exemptions under the Greek taxation system, these are as follows:
The examples of Tax deductibility in Greece are, as with most other features of Greek taxation, similar to that of other Western European and North American nations, that is, tax deductibility for things such as charity and other things as shown below:
Taxation in the Netherlands is defined by the income tax, the wage withholding tax, the value added tax and the corporate tax.
This is a list of the maximum potential tax rates around Europe for certain income brackets. It is focused on three types of taxes: corporate, individual, and value added taxes (VAT). It is not intended to represent the true tax burden to either the corporation or the individual in the listed country.
Taxation in Denmark consists of a comprehensive system of direct and indirect taxes. Ever since the income tax was introduced in Denmark via a fundamental tax reform in 1903, it has been a fundamental pillar in the Danish tax system. Today various personal and corporate income taxes yield around two thirds of the total Danish tax revenues, indirect taxes being responsible for the last third. The state personal income tax is a progressive tax while the municipal income tax is a proportional tax above a certain income level.
Taxes in Iceland are levied by the state and the municipalities. Property rights are strong and Iceland is one of the few countries where they are applied to fishery management. Taxpayers pay various subsidies to each other, similar to European countries that are welfare states, but the spending is less than in most European countries. Despite low tax rates in relation to European welfare states, overall taxation and consumption is still much higher than in countries such as Ireland. Employment regulations are relatively flexible. The tax is collected by Skatturinn, the Iceland Revenue and Customs Agency and is due in March each year.
Netherlands benefits from a strategic geographic location, a world-class economy, a stable political climate, and a skilled workforce. The Netherlands has a large network of tax treaties, a low corporate income tax rate and a full participation exemption for capital gains and profits. These characteristics, in addition to a favorable tax environment, make Netherlands one of the most open economies in the world for multinational corporations (MNCs).
In Austria, taxes are levied by the state and the tax revenue in Austria was 42.7% of GDP in 2016 according to the World Bank The most important revenue source for the government is the income tax, corporate tax, social security contributions, value added tax and tax on goods and services. Another important taxes are municipal tax, real-estate tax, vehicle insurance tax, property tax, tobacco tax. There exists no property tax. The gift tax and inheritance tax were cancelled in 2008. Furthermore, self-employed persons can use a tax allowance of €3,900 per year. The tax period is set for a calendar year. However, there is a possibility of having an exception but a permission of the tax authority must be received. The Financial Secrecy Index ranks Austria as the 35th safest tax haven in the world.
Taxation in Italy is levied by the central and regional governments and is collected by the Italian Agency of Revenue. Total tax revenue in 2018 was 42.4% of GDP. The main earnings are income tax, social security, corporate tax and value added tax. All of these are collected at national level, but some differ across regions. Personal income taxation in Italy is progressive.
Taxes in Germany are levied at various government levels: the federal government, the 16 states (Länder), and numerous municipalities (Städte/Gemeinden). The structured tax system has evolved significantly, since the reunification of Germany in 1990 and the integration within the European Union, which has influenced tax policies. Today, income tax and Value-Added Tax (VAT) are the primary sources of tax revenue. These taxes reflect Germany's commitment to a balanced approach between direct and indirect taxation, essential for funding extensive social welfare programs and public infrastructure. The modern German tax system accentuate on fairness and efficiency, adapting to global economic trends and domestic fiscal needs.
Taxation may involve payments to a minimum of two different levels of government: central government through SARS or to local government. Prior to 2001 the South African tax system was "source-based", where in income is taxed in the country where it originates. Since January 2001, the tax system was changed to "residence-based" wherein taxpayers residing in South Africa are taxed on their income irrespective of its source. Non residents are only subject to domestic taxes.
Taxes in Portugal are levied by both the national and regional governments of Portugal. Tax revenue in Portugal stood at 34.9% of GDP in 2018. The most important revenue sources include the income tax, social security contributions, corporate tax and the value added tax, which are all applied at the national level.
In Slovakia, taxes are levied by the state and local governments. Tax revenue stood at 19.3% of the country's gross domestic product in 2021. The tax-to-GDP ratio in Slovakia deviates from OECD average of 34.0% by 0.8 percent and in 2022 was 34.8% which ranks Slovakia 19th in the tax-to-GDP ratio comparison among the OECD countries. The most important revenue sources for the state government are income tax, social security, value-added tax and corporate tax.
Taxes in Bulgaria are collected on both state and local levels. The most important taxes are collected on state level, these taxes include income tax, social security, corporate taxes and value added tax. On the local level, property taxes as well as various fees are collected. All income earned in Bulgaria is taxed on a flat rate of 10%. Employment income earned in Bulgaria is also subject to various social security insurance contributions. In total the employee pays 13.78% and the employer contributes what corresponds from 18.92% to 19.62%. Corporate income tax is also a flat 10%. Value-Added Tax applies at a flat rate of 20% on virtually all goods and services. A lower rate of 9% applies on only hotel services.
The tax system of the Czech Republic is similar in its main features to the systems of developed and especially European countries.
Taxes in Poland are levied by both the central and local governments. Tax revenue in Poland is 33.9% of the country's GDP in 2017. The most important revenue sources include the income tax, Social Security, corporate tax and the value added tax, which are all applied on the national level.
Taxes in Lithuania are levied by the central and the local governments. Most important revenue sources include the value added tax, personal income tax, excise tax and corporate income tax, which are all applied on the central level. In addition, social security contributions are collected in a social security fund, outside the national budget. Taxes in Lithuania are administered by the State Tax Inspectorate, the Customs Department and the State Social Insurance Fund Board. In 2019, the total government revenue in Lithuania was 30.3% of GDP.
Taxation in Hungary is levied by both national and local governments. Tax revenue in Hungary stood at 38.4% of GDP in 2017. The most important revenue sources include the income tax, Social security, corporate tax and the value added tax, which are all applied at the national level. Among the total tax income the ratio of local taxes is solely 5% while the EU average is 30%.
Taxation in Belgium consists of taxes that are collected on both state and local level. The most important taxes are collected on federal level, these taxes include an income tax, social security, corporate taxes and value added tax. At the local level, property taxes as well as communal taxes are collected. Tax revenue stood at 48% of GDP in 2012.
Taxes in Cyprus are levied by both the central and local governments. Tax revenue stood at 39.2% of GDP in 2012. The most important revenue sources are the income tax, social security, value-added tax and corporate tax, and are all collected by the central government.
A value-added tax is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared with, a sales tax. VAT is an indirect tax, because the consumer who ultimately bears the burden of the tax is not the entity that pays it. Specific goods and services are typically exempted in various jurisdictions.
The organization responsible for tax policy in Ukraine is the State Fiscal Service, operating under the Ministry of Finance of Ukraine. Taxation is legally regulated by the Taxation Code of Ukraine. The calendar year serves as a fiscal year in Ukraine. The most important sources of tax revenue in Ukraine are unified social security contributions, value added tax, individual income tax. In 2017 taxes collected formed 23% of GDP at ₴969.654 billion.
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