Greece VAT Tax
VAT in Greece - Complete Guide for Expats
Table of Contents
VAT in Greece
Greece’s taxation system is known for its complexity and imposition of one of the highest value-added taxes in Europe. In light of these factors, allow us to provide clarity on the key conditions and rates of Greek value-added tax, while also presenting strategies to significantly minimize or potentially eliminate it altogether.
In general, you are expected to pay VAT in the following cases:
- Selling goods and services online
- Providing residential and commercial property construction or renovation services
- Importing commodities by sea
- Offering services or products in the fashion industry.
Moreover if your legal entity is not a resident of the EU, it is advisable to engage a tax agent who can represent you before the Tax Department. This requirement also applies if you offer products and services to other legal entities or individuals, with amounts exceeding €10,000 or €35,000 respectively.
It is crucial to bear in mind that both you and your tax agent will share joint responsibility for any debts, penalties, or financial obligations pertaining to VAT.
The Greek IRS offers four VAT categories based on the nature of your goods and services.
1. Super-reduced value-added tax of 6% applies to:
- Printed materials like books, newspapers, electronic books and magazines
- Medical services that includes dental work and pharmaceutical products (except those listed in the following category).
- Electricity and gassupply, as well as central or localized heating.
- Services and goods related to artistic, sports and cultural activities like theatre, dance, music, cinema, entertainment parks, zoos and sports matches.
2. Reduced value-added tax of 13% applies to:
- Food and non-alcoholic beverages
- Healthcare for the elderly, children, and individuals with disabilities, as well as products related to viral or bacterial protection.
- The tourist industry, including caravan and camping sites, and all associated services.
- Domestic or imported works of art and antiquities.
3. A standard value-added tax of 24% applies to all products and services not mentioned in the above categories.
4. Entities registered on Kos, Chios, Lesvos, Leros, and Samos receive a 30% discount.
Documents Required for VAT Registration
The documentation required will vary based on your individual circumstances. However, in general, you will likely need to submit the following documents.
Tax Reductions and Exemptions:
- VAT number from your home country
- Trade registration certificate from your home country
- Proof of your signature
Additionally, you will need to provide all relevant documentation to confirm your intention to produce or import commodities subject to value-added tax in Greece. Please note that collecting these documents can be challenging without the assistance of legal services.
It is important to remember that all documentation must be translated into the Greek language and certified by a notary.
Tax Reductions and Exemptions
In this section, we will explore scenarios you can significantly reduce or completely avoid Greek taxes, including VAT. Given the exorbitant VAT rates in the country, the potential savings can be substantial, with certain deductions amounting to as much as 15%. We’ll delve into the details of these possibilities and the benefits they offer.
To potentially qualify for significant tax reductions, there are several actions you can take, including:
- Making mandatory payments to social insurance funds.
- Applying for mortgage loan to purchase your first private real estate in the country.
- Fully repaying the lease amount for your primary residential unit in Greece.
- Donating amounts above specified thresholds to various community organizations, such as educational, religious, and medical centers.
By implementing these strategies, you may be able to reduce the amount of taxes you are required to pay while complying with the law and supporting important causes in your community.
Moreover, you may even be exempt from certain tax obligations if you meet the following conditions:
- Spending less than six months per year in the country will exempt you from being classified as a tax resident.
- Profits derived from shipping commodities across the border are eligible for tax exemption.
- Dividends received from financial transactions on the Athens Stock Exchange and from commercial entities registered in the country are also exempt from taxation.
- If you transfer a commercial enterprise to or from family members residing in Greece, any resulting profits will be exempt from taxation.
- Additionally, profits generated from international airfare, sea transportation of passengers (both internationally and domestically), and tourist cruises are not subject to Value Added Tax (VAT).
Special Terms for US Citizens
Under the Double Taxation Treaty that is signed between USA and Greece, US citizens are exempt from dual taxation. However, it is advisable to seek guidance from a legal representative or the relevant revenue authorities in Greece or the USA to determine the country responsible for claiming your taxes, as these arrangements are subject to periodic revisions.
Special Terms for Chinese Citizens
Under the Double Taxation Treaty that is signed between China and Greece, Chinese are exempt from dual taxation. However, it is advisable to seek guidance from a legal representative or the relevant revenue authorities in Greece or Chine to determine the country responsible for claiming your taxes, as these arrangements are subject to periodic revisions.
Value Added Tax Refund
In simple terms, Value Added Tax (VAT) is only applicable to goods and services consumed within a country. This means that anything a foreigner purchases in Greece to take with them when they leave is exempt from this type of taxation, as it is considered an exported commodity. However, there are certain conditions that need to be met in order to qualify for a VAT refund:
- Your total purchases must be worth at least 120 euros.
- The goods must have been purchased within three months prior to your departure.
- If the goods have special packaging, they must remain unsealed.
- Please note that customs officers may ask to inspect the goods for which you are claiming a VAT refund to ensure they have not been consumed within the country.
By adhering to these qualifications, you can enjoy the benefits of VAT refunds when shopping in Greece.
Business VAT Refund Application Procedure
According to EU legislation, you must submit your refund application to the relevant tax authorities in your home country. They will then electronically forward it to the Internal Revenue Service in Greece within two weeks. Alternatively, your legal agents can apply on your behalf, provided you provide them with your login details for your VAT Refunds Portal profile.
Your e-application form should include the following information:
- Your full name, contact details, and business address
- VAT identification number
- Credentials of your legal agent (if applicable)
- Period of time covered by the refund
- Your banking information
- Full name, tax ID, business address and reference number of the supplier
- Receipt with transaction date and number
- VAT amount in euros
Please note that if the refund period is between three and twelve months, the minimum refund amount is 400 euros. For periods longer than one year, the minimum amount is 50 euros.
For a comprehensive understanding of value added taxation in Greece, we advise seeking guidance from a legal professional. While we can provide a general review, consulting an expert will ensure accurate and specific information tailored to your needs. It’s important to note that VAT payments are due three times a year, with a deadline of the 2nd of each applicable month. Properly managing these obligations is crucial, and professional advice can guide you in the right direction.
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FAQ Greece VAT
How can I get a VAT number in Greece?
To submit your application form to the Internal Revenue Service, along with the required documents (refer to the relevant section above), it is advisable to seek professional assistance to ensure accuracy. This will help ensure that you complete the process correctly and efficiently.
Are US citizens exempt from paying a VAT in Greece?
Yes, if they pay taxes in the United States under the Double Taxation Treaty (refer to the relevant section above), they are eligible.
How can I get a VAT refund in Greece?
To ensure compliance, it is necessary to complete and submit an application form to the appropriate revenue authorities in your home country. Alternatively, if you are making personal purchases subject to VAT, you should submit the form to customs control upon departing from the country.
How can I charge and pay the VAT for goods imported to Greece?
To ensure transparency and compliance, it is essential to incorporate the value added tax into the total price of the respective commodity. This should be clearly indicated on the receipt, and the tax payment process should align with the procedures outlined in the relevant sections of this article.
What are the income and value added taxes in Greece?
Your tax will vary between 0% and 45%, depending on your income. Similarly, the value-added tax (VAT) will range from 4% to 24%, depending on the type of goods and services offered, as well as the conditions outlined in the corresponding sections of this article.
How long does a VAT refund in Greece take?
The refund requested through your application will be either approved or declined by the Internal Revenue Service within four months from the date of submission. In the event that additional information is required, the IRS legally has an additional two months to process your application. Once approved, you can expect to receive your refund within two weeks.