On July, the new Income Tax Code was voted (L.4172/23.07.2013). The new law provides for the income taxation of individuals and corporations, aiming to simplify the current taxation system, as well as introduces tax rules acceptable by the international taxation practice.

In principle (unless otherwise stated) the new provisions apply to income earned and expenses incurred on tax years starting from January 1st 2014 onwards.


  1. 4172 / 23.07.2013











Taxation subjects

Individuals having their tax residence in Greece are subject to tax in Greece for their worldwide income.

Non Greek tax residents as well as foreign employees working on L.89/1967 offices are subject to tax only for their domestic income.


Tax residence

An individual is a Greek tax resident, provided that:

  • he maintains in Greece his permanent or primary home or habitual adobe or the centre of his vital interests or
  • he is a consular or diplomatic employee or a similar public servant or a public servant of Greek nationality working abroad or
  • he has a physical presence in Greece exceeding 183 days within a 12month period (continuously or not).

A legal entity is classified as a Greek tax resident, in case:

  • it is established or incorporated under the Greek law,
  • its registered office is in Greece or
  • the place of its effective management is in Greece.


Permanent establishment (PE)

The term PE means a fixed place of business through which the business of an enterprise is wholly or partially carried on, such as:

  • a place of management,
  • a branch,
  • an office,
  • a factory,
  • a workshop and
  • a mine, an oil or gas well, a quarry or any other place of extraction of natural resources.

In concept the term PE is set based on OECD guidelines.


Categories of taxable income

The taxable income is calculated after the deduction of expenses, provided by the law, from the gross income.

The income is divided in the following four (4) categories:

  • payroll and pension income,
  • business income,
  • capital income, ü capital gains.


Tax year

The tax year aligns with the calendar year, while the option for a tax year to exceed 12 month is abolished.

Legal entities, keeping double-entry accounting books, have the option to set their tax year to end at 30th of June.

Local subsidiaries (where the parent shareholding exceeds 50%) may set their tax year to end at the same date as their parent.


Foreign tax credit

In respect of taxed income from foreign resources, a tax credit is provided limited to the amount of domestic tax.




Payroll and pension income

Payroll and pension income includes every kind of income as well as benefits in kind due to a current, past or future employment relationship.

The employment relationship is in place when an individual provides services:

  • under an employment contract according to the labor law provisions,
  • under an oral agreement where the counterparty has the right to determine and control the manner, the time and the place of service,
  • under the regime of public servants,
  • as a director or a board member,
  • as a lawyer in permanent basis,
  • under written contracts up to three (3) counterparties or in case of excess when 75% of the income comes from one (1) of the counterparties and at the same time the deductible expenses do not exceed 9.250 € per year.


Benefits in kind

According to the new law the following benefits in kind are considered as taxable income:

  • benefits in kind to an employee or his relative exceeding 300 € per tax year,
  • granting of a company car to an employee, partner or shareholder, where 30% of car expenses is considered as income,
  • granting of a loan, through a written agreement, to an employee, partner or shareholder, where the difference between the actual and the defined through Ministerial decision rate is considered as income. In case of a not written agreement, the total amount of the loan is considered as income. A payroll advance exceeding three (3) months is considered as a loan.
  • the profit from stock option plans granted to an employee, partner or shareholder
  • house rental payments to an employee, partner or shareholder or in case of owned houses 3% on the objective value is considered as income


Tax scale for payroll and pension income

The taxable payroll and pension income (i.e. gross income minus income deductions), is subject to tax according to the following scale:


Taxable income (€) Tax rate
0 – 25.000 22%
25.001 – 42.000 32%
excess 42%


Tax credits

The income tax is reduced due to the following tax credits:

  • For taxable income less than 21.000€ the tax is reduced by 2.100€. Such a tax credit is gradually eliminated when income is growing and up to 42.000€ where zero credit applies.
  • 200€ tax credit for disabled depended persons,
  • tax credit at 3.000€ max. for medical expenses,
  • tax credit 10% on donations exceeding 100€ per year and up to 5% on taxable income,
  • tax credits do not apply for non Greek tax residents, unless they are tax residents of EU or EEA under certain conditions.









As business profits are considered the total income from business transactions after the deduction of business expenses, depreciation and provision for bad debts.  In case three (3) transactions of same nature take place within a 6month period, they are considered as business transactions. In case of transactions related to immovable property, the period is extended to two (2) years.

Any increase in property derived from illegal, unjustified or unknown source is considered as business profits.


Tax deductible expenses

In order the business expenses to be tax deductible, they must be performed for business benefit, must be real and of a realistic value, must be booked in the proper year and has to be documented.

(applicable for expenses incurred on tax years closing after June 30th 2014) 


Non tax deductible expenses

  • interest expenses (other than bank interests) in excess of the current bank interest rate,
  • expenses above 500€ not paid through bank,
  • not paid social security contributions,
  • bad debts provisions exceeding the limits defined by the new law,
  • fines and penalties,
  • expenses constituting a criminal offense,
  • taxes such as income tax, special taxes and VAT non deductible,
  • deemed rental on owned buildings exceeding 3% of the objecting value,
  • food and accommodation expenses during informative events exceeding 300€ per participant or in excess of 0,5% on gross income,
  • food and accommodation expenses during celebration events exceeding 300€ per participant or in excess of 0,5% on gross income,
  • entertainment expenses,
  • personal consumable expenses,
  • expenses paid to enterprises established in countries non-cooperative for tax purposes or countries with a favorable tax regime (tax rate lower than 50% of the local tax rate).

(applicable for expenses incurred on tax years closing after June 30th 2014)  Depreciations

Depreciations performed from the owner of the fixed assets or the lessee (in case of a financial leasing agreement), are considered as deductible expenses.

The depreciation rates per category of fixed assets are as follows:


Fixed asset category Depreciation rate
Buildings and technical constructions 4%
Extraction sites and quarries 5%
Mass transfer means including aircrafts, trains, ships and vessels 5%
Machinery equipment other than H/W and S/W 10%
Means for transportation of person 16%
Means for internal transportation of goods 12%
Intangible assets, rights and capitalized expenditure 10%
H/W and S/W equipment 20%
Other assets 10%


At any case the depreciation of intangible assets and rights aligns with the asset’s contractual useful life.

The yearly depreciation is mandatory, can not be brought forward and starts from the next month from asset’s operation.

Fixed assets with purchase value less than 1.500€ may be fully depreciated within the first tax year.

New enterprises may postpone the depreciations for the first three (3) years of operation.

(applicable for tax years closing from January 1st 2014 on wards) 


Bad debts

For outstanding receivables where the proper actions for collectability have been taken, the provision for bad debts that can be deducted for income tax purposes is as follows:

Outstanding receivable (€) Overdue period Provision for bad debts
up to1.000 > 12months 100%
Exceeding 1.000 > 12months 50%
> 18months 75%
> 24months 100%


The bad debts provision does not apply to:

  • outstanding receivables from shareholders, partners and related entities, holding interest at least 10%, unless the respective issue is pending in Courts,
  • insured or guaranteed receivables,
  • receivables from the Public Sector or guaranteed by the Public.


Below bad debts provision rates apply for specific enterprises of the financial sector:

  • Banks – 1% on yearly average loans balance,
  • Leasing Companies – 2% on leasing contracts commenced during the tax year, where the cumulative provision can not exceed 25% on the Share Capital, ü Factoring Companies – 1,5% or 1%.

(applicable for expenses provided on tax years starting on January 1st 2014 onwards) 


Carried forward loses

Tax loses can be carried forward to offset taxable profits for the next five (5) consecutive years.

The losses from the exchange of the Greek Public Bonds (through PSI) are deductible equally within thirty (30) years.

Losses incurred outside of Greece can be either deducted or carried forward in order to reduce the income only from other EU or EEA member states and to the extent such an income is not tax exempted by the respective DTAs between Greece and the member states.

In case of change in ownership or voting rights exceeding 33%, the current and previous tax losses are not deductible, unless it can be proved that change in ownership was not aiming to tax avoidance or tax evasion.


Indirect methods for determination of profits

In the below cases, business profits are determined through indirect audit methods (provided by the Code of Tax Procedures):

  • not accounting books are kept or single-entry books are kept instead of doubleentry ones or the tax-related documents are not maintained, making the tax audit not possible,
  • the accounting books and records are not maintained or not disclosed following two (2) requests for a fiscal tax audit, unless they can be reliably reproduced. (applicable for tax years closing from January 1st 2014 on wards)


Tax rate

In particular, below tax rates apply to individual businessmen as well as to enterprises which maintain single-entry accounting books.

The taxable business profits are subject to tax according to the following scale:

Taxable profits (€) Tax rate
Up to and including 50.000 26%
Exceeding 50.000 33%


In case of new individuals businessmen, the tax rate of 26% is reduced to the half (1/2) for the first three (3) years of operation, provided that the yearly gross income does not exceed 10.000€.

The profits from agricultural enterprise performed by individual are taxed by 13%.

The profits from illegal, unjustified or unknown sources are taxed by 33%.



Individuals are taxed on their declared actual or imputed income, whichever is highest.

Income is imputed on the basis of living expenditure or acquisition of certain assets. For the computation of imputed income based on living expenses, the following are taken into account:

  • the size of the primary residence,
  • the size of any other residence/s,
  • the engine size of motor vehicles,
  • the cost of private schools,
  • the deemed cost for house personnel,
  • the deemed cost of use of pleasure boats, aircrafts and helicopters,
  • the size of a swimming pool,
  • a minimum deemed amount (3.000€ for individuals – 5.000€ for families), applicable in case actual or imputed income is declared.


For the computation of imputed income based on acquisition expenses, the following are taken into account:

  • the purchase or lease of cars, pleasure boats, aircrafts and movable assets with high value,
  • the purchase of enterprises, shares, participations as well as the capital increase to all legal forms,
  • the purchase, time-sharing or financial leasing of real state as well as the construction of buildings and swimming pools,
  • the granting of loans,
  • the granting of donations, parental benefits and sponsorships exceeding 300€ per year,
  • the repayment of loans or credits.

It is noted that certain exceptions from imputed income are provided, such as to disabled persons, expatriates etc.





The following categories of income earned by individuals are considered as income from capital:

  • income from dividends
  • income from interest
  • income from royalties and similar rights
  • income from real estate property (in cash or in kind*)

(*) Income in cash (leasing or subleasing) as well as income in kind (self-use or grant of use free of charge). Income in kind is calculated at market value and in cases of self-use or grant of use free of charge, the presumed income is calculated as 3% on real estate’s objective value. The free of charge grant of use of primary residencies to ascendants or descendants is tax exempt. 


Tax rate

The taxable income from capital is subject to the following tax rates:


Category of income from capital Tax rate
Income from dividends 10%
Income from interest 15%
Income from royalties and similar rights 20%
Income from real estate property
– Up to and including 12.000 11%
– Exceeding 12.000 33%



Capital gains from transfer of real estate property

Capital gains from transfer of real estate or rights related to real estate or holdings attracting more than 50% from real estate are subject to tax.

The capital gain is calculated as the difference between purchase and deflated sales price, after adjustments due to ageing deductions as follows:

Years of ownership Ageing deduction
From 1 – up to 5 0,95
From 5 – up to 10 0,87
From 10 – up to 15 0,79
From 15 – up to 20 0,73
From 20 – up to 25 0,66
Exceeding 25 0,61


The, adjusted by ageing deductions, capital gain and up to 25.000 €, is tax exempt in case the transferor owned the property for at least five (5) years and not any other transfer took place within this period of ownership.

Loss from transfer of real estate can be carried forward for indefinite time and can be set-off only from specific capital gains in the future.

(applicable for capital gains realized from January 1st 2014 onwards) 


Capital gains from transfer of securities

The term transfer of securities has the meaning of:

  • transfer of a business
  • transfer of shares (listed or not)
  • transfer of parts in partnerships
  • transfer of state or corporate bonds
  • transfer of state treasury bills
  • transfer of bank derivatives and financial instruments

The capital gain is calculated as the difference between acquisition and sales price. Loss from transfer of securities can be carried forward for indefinite time and can be set-off only from specific capital gains in the future.

(applicable for capital gains realized from January 1st 2014 onwards)


Capital gains arising from the exchange of Greek State or corporate bonds guaranteed by the Greek State with other securities (PSI) remain tax exempt. (applicable for capital gains realized from February 29th 2012) 


Tax rate

The income from capital gains is subject to 15% tax.




Taxation subjects and exemptions

As subject to corporate income tax is all kind of legal entities and enterprises such as SAs, LTDs, IKEs, partnerships, civil law societies, joint ventures etc.

Non profit entities are not subject to tax only for the income that falls into their scope of activities.

In the law there is definition of tax exempt legal entities, such as the Greek State, the Bank of Greece, International Organizations etc.

The total income earned from the above taxable legal persons is considered as corporate income.


Tax relief on intergroup dividends

Under the following conditions, the dividends received either by legal entities or Greek tax residents, are tax exempted:

  • beneficiary’s holding has to be at least 10%
  • beneficiary’s holding has to be retained for at least two (2) years
  • the distributing entity must not be established in non-cooperative country In case the holding period is less than two (2) years, a guarantee mechanism is provided in order the state to be secured.

In case the distributed dividends are connected with the participation of the distributor to another legal entity, the beneficiary can not deduct the business expenses corresponding to this participation.


Thin capitalization

The net interest expense (interest expenses minus interest income), is not tax deductible if exceeding 25% of EBITDA including tax adjustments.      

The above limitation does not apply in case the entity is not part of group and the net interest expenses do not exceed 1.000.000 € per year.

The not deducted expenses according to the above limitations can be carried forward to the next five (5) years.

Thin capitalization rules do not apply to credit institutions.


Intergroup transactions

All transactions between related entities have to be in line with the arm’s length principal as provided by OECD guidelines, since any deviation to these rules impacts to increase of the tax liability.

The arm’s length principle should also apply to transfer of business functions. The detailed provisions for the documentation of these transactions are included in the Tax Procedures Code (L.4174/2013).

According to the Tax Procedures Code, the documentation is implemented through the preparation of a relevant File (Master File and Local File) and furthermore there is obligation for submitting a Summary Informative Table (SIT) at the tax authorities.

The obligation of preparation of the File and submission of SIT applies to:

  • enterprises with turnover up to 5.000.000€, when intergroup transactions exceed 100.000€ cumulatively per year,
  • enterprises with turnover exceeding 5.000.000€, when intergroup transactions exceed 200.000€ cumulatively per year.


Tax advantages on restructurings

Under certain conditions the following business restructurings between EU entities can be realized under a neutral tax environment: ü transfer of business sectors against receipt of shares,

  • exchange of shares,
  • mergers and spin-offs,
  • transfer of the registered office of a European Company (SE) or a European Cooperative Society (SCE).

The tax advantages mainly refer to the possibility of carried forward losses as well as to non taxation of goodwill.

The tax advantages do not apply in case the aforementioned restructurings aimed to tax avoidance or tax evasion.

(applicable to business restructurings effected from January 1st 2014 onwards) 


Tax rate

The corporate income tax for legal entities with double-entry accounting books is 26%.

In case the legal entity maintains single-entry books, the profits are taxed according to the rates provided for business profits for individuals.

The profits earned from agricultural activities by cooperatives and group producers are taxed by 13%.




According to the law the following sources of income are subject to Withholding Taxation (WT):

  • Payroll and pension income is subject to WT on monthly basis according to the relevant tax scale. The reduction of WT by 1,5% still applies. In case the payer does not withhold the tax provided for payroll income, is liable for the non withheld tax plus penalties and fines.
  • Dividends payments are subject to WT at 10%,
  • Interests payments are subject to WT at 15%,
  • Royalties payments are subject to WT at 20%,
  • Fees for technical services, management fees, fees for consulting and similar services regardless if the services were provided in Greece or abroad, are subject to WT at 20% (or 3% in case of technical projects), under the condition that the beneficiary is an individual,
  • Insurance compensations in the context of group pension insurance contracts, are subject to WT at 15% when paid periodically or in case of lamp sum payments the WT is 10% up to 40.000 € and 20% in excess. The pre-said rates are increased by 50% in cases of early redemptions while some exceptions from such increase are provided,
  • Capital gains from transfer of real estate earned by individuals are subject to WT by 15%,
  • Sales of goods and provision of services by legal entities to the Greek State are subject to WT according to the following rates:
    • 1% for liquid fuel and tobacco,
    • 4% for other goods,
    • 8% for provision of services.

Various exceptions from WT on sales to the Greek State are provided (such as for transactions not exceeding 150 € before VAT, for electric power, water supply, telecommunications etc.).

(applicable to payments performed from January 1st 2014 onwards) 


Intra-EU payments related to dividends, interests and royalties are exempted from WT, under the conditions set by EU directives for Parents and Subsidiaries. Although not specifically mentioned in the new law, the WT on payments to foreign enterprises which are residents in countries where a Double Taxation Agreement (DTA) applies, is ruled by the specific DTA, which supersedes local legislation.




Non-cooperative countries and countries having favorable tax regime The provisions regarding the non deductibility of expenses paid to suppliers which are tax residents in non-cooperative countries or countries having favorable tax regime, remain in force.

These countries are defined by Ministerial decision every year on January.


Controlled foreign companies

For the first time the local tax law introduces rules related to Controlled Foreign Companies (CFC) in order to prevent the tax avoidance through the shifting of income to foreign subsidiaries established in countries with low tax regime. According to these new provisions and in case the subsidiary meets the criteria set for a CFC, the taxable income of a local entity is increased by the non distributed income of the CFC.




Tax returns

Individuals adults and legal entities are obliged to declare all income either taxable or tax exempted.

The tax return is filled within February 1st and June 30th every year and corresponds to income of the previous year.


Tax advance

The tax advance for the individuals remains at 55% on the main income tax, after deduction of tax withheld.

The tax advance does not apply if the source of income exclusively occurs from payroll, pension and self-use of house income, while is reduced to ½ for the first filling of tax return.

Different tax advance rates are provided for architects, mechanics and lawyers under the conditions set by the law.

The tax advance rates for legal entities in general remain at the same levels (i.e.

100% for banks, 80% for SAs, LTDs, 55% for OE, EE etc.).

Joint Ventures between SAs and LTDs are subject to 80% tax advance, while the Joint Ventures between partnership companies (OE, EE) are subject to the lower rate of 55%.

For the first three (3) years of operation, the tax advance for the legal entities is reduced to ½.

In certain cases the tax advance does not apply, such as in case that companies are transformed or merged under the provisions of L.1297/1972, L.2166/1993,

L.2190/1920,  L.3190/1955 or special rules, as well as for distributed or capitalized profits of SAs exempted from taxation according to special law provisions.




Taxation of reserves

Non-distributed or non-capitalized reserves of legal entities, according to the last balance-sheet before January 1st 2014, corresponding to profits not taxed through exemptions provided by L.2238/1994 or respective decisions and circulars, are taxed by 15% in case of distribution until December 31st 2013.

From January 1st 2014 onwards, the above reserves are obligatory set-off with losses occurred at the last five (5) years, unless they are distributed or capitalized whereas they are subject to19% taxation.

Taxation of reserves (15% or 19%) exhausts the liability of the legal entity or their shareholders’ or partners’.

Keeping of a tax free reserve account is not allowed from January 1st 2015 onwards.



The provisions of this tax law do not affect the existing provisions for the following companies:

  • Shipping companies and related individuals
  • Real estate investment companies
  • Venture capital companies (EKES) and
  • Venture capital funds (AKES)

The provisions of this law relating to tax residence do not apply in companies established under L.27/1975 and PD 2687/1953.

Luxury tax

The imputed luxury tax on presumed income based on the use of cars, airplanes, helicopters, gliders and swimming pools, which was applicable from fiscal year 2014 according to L.4110/2013, is amended and now applies from fiscal year 2013 onwards.


Tax payment

In case of finalization of tax assessments, the option to pay the taxes in installments is now abolished and the tax is payable up to the end of the next month from the date of finalization.

Tax penalties through the provisions of articles 4, 5 and 6 of L. 2523/1997 after the provided reduction, are payable up to the end of the next month, provided that 20% or 30% is paid on the date of settlement.









The information included in the present document is intended to provide a general guidance and can not be used in resolving specific taxation issues.