In order to attract foreign investors, Greece has signed Greek double taxation avoidance agreements with numerous states, such as Albania, Armenia, Austria, Azerbaijan, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Hungary, Iceland, India, Ireland, Israel, Italy, Korea, Kuwait, Latvia, Lithuania and Luxembourg.
It has also signed this type of tax agreement with Malta, Mexico, Moldova, Morocco, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey, United Kingdom, Ukraine, United States of America and Uzbekistan. Many drafts are still waiting to be signed by the Greek Minister of Finance.
These documents provide tax regulations for both legal entities and individuals who are citizens of one state and obtain income from various activities in another state, such as Greece. Considering that the agreements refer to a variety of income, taxes and tax rates, our lawyers in Greece can offer the necessary tax consultancy services.
| Quick Facts | |
|---|---|
| What is a treaty for the avoidance of double taxation? | It is a document signed by two states, which provides double tax avoidance solutions for entities that obtain income from various activities carried out in the two states. |
|
What is double taxation? |
It refers to the taxation of the same type of income obtained in two different countries by a taxpayer, during the same tax period. |
|
When do tax obligations appear in Greece for a foreigner? |
After staying in the country for more than 183 days/year or being shareholder in a Greek company. |
| Taxable income in case of a foreigner | Corporate and personal income, capital gains, etc. |
| Entities that can be charged for their income in Greece |
Individuals, companies, non-profit organizations, etc. |
| Model for the Greek double tax agreements (DTAs) |
Following the OECD’s Model Convention |
| Types of income that are subject to DTAs |
The Greek double taxation avoidance agreements refer to different types of income such as: business profits, salaries, income from immovable property, dividends, royalties, interest, capital gains, pensions, personal income, etc. |
| The definition of a permanent establishment, according to DTAs |
According to the Greek double taxation avoidance agreements, a permanent establishment refers to a place of business where a company carries out its operations (partly or wholly), which can be: a branch, office, factory, workshop, construction site, etc. |
| Methods applied for the avoidance of double taxation |
The exemption and the credit methods |
| Number of DTAs signed by Greece | 57 |
| Taxation principle applicable to dividends |
Dividends paid by Greek resident companies to residents of another contracting state will be taxed in the other contracting state as a general rule. They can also be charged in Greece in specific conditions. |
| What are dividends? |
Dividends refer to income from shares. |
| Taxation principle applicable to interest, royalties and capital gains |
The same principle applicable to dividends |
| Place of taxation for pensions |
Only in the country where the past employment (based on which the pension is granted in the present) occurred. |
| Place of taxation for business profits |
In the country where the company has its tax residency. The place of taxation can also be the other state if the company carries its operations through a permanent establishment (situation in which the company will pay taxes in the other state only for the income obtained from the operations developed through the permanent establishment). |
Table of Contents
General information on how Greece double taxation treaties work
Greece double taxation treaties establish the place of taxation for the same type of income obtained by one entity (natural person or legal entity) in 2 different countries.
In the case of an investor, one must submit a proving certificate stating that the applicant is already a taxpayer in the country of origin, a declaration from the payer stating that he’s the beneficial owner of the income and other documents that might be considered relevant by the Greek tax authorities. The regulations of a double tax treaty have priority ahead the local tax laws and other Greek laws.
The same rights are also granted to individuals who obtain income in 2 different countries, one of which is Greece. Please know that tax obligations can appear to foreigners who are Greek tax residents, as well as those who are not residents of Greece, but who obtain taxable income in this country (for instance, from the rental of properties owned here). Our Greek lawyers may further advise on this.
The withholding taxes on dividends, interest and royalties are also affected by the provisions of various double tax treaties. Usually, royalties and dividends paid to a non-resident are taxed at a rate of maximum 25%. The provisions of the treaties minimize these taxes and in certain cases dividends, interests and royalties are exempt from taxation.
The above provisions could encourage the tax evasion so special treaties regarding the tax information exchange are signed every year between Greece and other countries. Besides these treaties, special provisions are stipulated at the end of each treaty regarding this matter. This way, the participant countries know exactly which entities are paying taxes and which don’t.
Income subjected to a double taxation agreement in Greece
Although Greece has signed 57 different double tax treaties, it must be noted that all these documents refer to the taxation of the same income, regardless of the country. Our Greek lawyers have prepared a list with the main income regulated by any double taxation agreement in Greece:
- the income obtained by legal entities;
- the income obtained by natural persons;
- the capital tax obtained by companies and individuals.
These types of income make the object of all Greece double taxation treaties. All these treaties are signed between 2 contracting states (Greece and a partner country) and the documents regulate the taxation of the above-mentioned income in both states, although differences in taxes may appear due to the national tax law of each country.
Terms established under double tax treaties
In the list below, our attorneys in Greece present some of the rules established under the Greece double taxation treaties:
- an individual can be considered a tax resident of a state when he or she lives in that state for more than 183 days in a financial year;
- differences can appear in Greece double taxation treaties – for instance, most of the tax treaties simply stipulate that the taxation of personal services is done in the state where the person has his or her tax residency, but the tax treaty US-Greece mentions an income threshold of $10,000 as well;
- it also regulates the term permanent establishment, which can be an office, a branch, etc., or a building site that lasts for more than 6 months or 12 months depending on the treaty (the tax treaty US-Greece does not regulate this term).
Our team of lawyers can present other types of taxes that are charged in Greece. If you want to buy a house in Greece, please mind that there will be certain taxes charged for this procedure. A person who will purchase a property should pay the VAT, the property transfer tax and the stamp duty. To these, the registration fee, the notary fees and the lawyers’ fees must be added.
We invite you to address our law firm in Greece for further information on the provisions of the double tax treaties signed by the Greek authorities with partner countries or any other information on the Greek tax system.