All companies in Greece have to register for value added tax (VAT) purposes. However, the obligation to register is mandatory when a certain revenue threshold is achieved by the company, but this is applicable in specific economic activities.
As a general rule, the procedure for VAT registration in Greece has to be concluded during the incorporation of the company.
Investors interested in starting a business in Greece must know that the VAT registration is required in the case of non-resident entities, as long as such entities will provide goods and services to Greek clients.
For advice on the registration procedure that is necessary to follow, our team of lawyers in Greece remains at your disposal.
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What are the VAT obligations of foreign companies in Greece?
Since foreign companies will develop some types of taxable activities in Greece, they have the obligation to register for VAT. This obligation arises regardless if the foreign company has established a physical place of business in Greece or not.
This means that a foreign company wishing to develop its business operations in this country is not legally required to commence the procedure of company incorporation in order to have the right to develop its activities.
The company can operate as a non-resident business that is registered for tax purposes in Greece. If the foreign business develops taxable activities, it must start the procedure for VAT registration in Greece before commencing its operations.
This is necessary regardless of the expected annual return, as the Greek tax law does not prescribe a minimum threshold for the VAT registration of foreign businesses (the same applies for Greek resident companies).
Thus, the foreign company must have a valid VAT number issued by the Greek tax authorities before starting any activity related to the Greek market. Please mind that there are different rules concerning distance sales.
This refers to non-resident businesses which sell goods over the internet to Greek customers. The VAT registration in Greece will not be required in this case, unless the business will reach a threshold of minimum EUR 35,000 per year.
Depending on the tax residence of the company, various tax obligations will appear. For instance, companies that are incorporated in the EU have to complete a set of tax documents once they trade and sell goods in Greece.
They will have to follow the same tax obligations imposed to Greek companies, which also includes the obligation to submit VAT returns.
Appointing a tax representative for the foreign company in Greece in 2023
For companies registered in countries outside the EU, additional requirements will apply. One of the main differences is that non-EU based companies selling goods in Greece will have to appoint a local tax representative so that they have the right to VAT registration in Greece.
The purpose of the tax representative is to be the person in charge with any tax obligations and liabilities of the foreign company operating here.
Foreign companies must know that the tax representative appointed in Greece can be:
- a natural person;
- a legal entity.
The main characteristic of the tax representative is that the person/company has his or her domicile in Greece or has its place of business/permanent establishment in Greece.
The tax residency in Greece is a mandatory requirement of any tax representative appointed by a foreign company, and it is the main requirement considering that the foreign company does not have a place of business here, but it has tax liabilities in this country.
When appointing a tax representative, the foreign company must sign a power of attorney, granting the right to tax representation to a Greek resident.
The power of attorney must present the main ways in which the tax representative can work for the foreign company in the relation with the Greek institutions.
Our law firm in Greececan present the legal procedures that must be completed in this case (the power of attorney must be drafted and signed in front of a notary public). It can also be done through consular legalization.
When are local and foreign companies required to have a VAT number in Greece?
There is a wide category of economic operators that have to apply for a Greek VAT number.
The number is issued as a part of the procedure for VAT registration in Greece and having a VAT number will imply that the respective entity will be liable to the payment of the VAT on the Greek territory, for the goods or services sold on this market.
Please mind that almost all business activities are liable to the payment of the VAT, and this obligation is not limited only to the sale of goods and services.
VAT obligations can appear from the import of goods as well. In the list below, our team of Greek lawyers has prepared a short presentation on the main VAT payers, as per the tax laws imposed in this country:
- the sale of goods and services on the Greek territory, as well as the purchase of such goods;
- the import of goods that are purchased from outside the European Union (EU) space;
- the sale of goods from Greece, which are destined to be purchased by entities from outside the country;
- the VAT is applied for the purchase of goods from other EU countries;
- an entity will need the VAT registration number in Greece even in the case in which the entity does not import, sale or buys goods, but it only holds goods as inventory on the Greek territory, as long as the said goods are destined for sale or distribution;
- VAT obligations will arise for e-commerce companies selling goods in Greece, for both resident and non-resident entities.
What are the VAT obligations in Greece in 2023?
Entities that were issued with a Greek VAT number will have numerous tax and VAT obligations. The obligation to register is imposed to all companies which are residents of Greece (meaning, all companies that were incorporated in Greece or which have set up a permanent establishment in Greece).
We invite you to watch a short video on the process of obtaining a Greek VAT number:
According to the Greek governmental portal, a company or another type of entity must have a VAT registration number in Greece if it will carry outtaxable operations. The obligation to have a VAT number is also imposed to tax exempt entities, which will still have to conduct the registration obligations.
Below, our Greek law firmhas gathered few information which should be of help for those interested in VAT registration in Greece:
- an exemption to register for VAT is applied to those who which are regulated under the rules of the Article 39 of the VAT Code, as well as to those prescribed by the Article 41;
- a flat-rate of VAT is applied to certain economic operators prescribed under the Article 40;
- entities that are entitled to a VAT flat-rate must apply for this special tax regime in a period of 30 days since the beginning of activities and they will enjoy thistax regime for a period of 5 years since the registration;
- foreign companies selling goods on the internet in Greece have the obligation to obtain a Greek VAT number when they reach EUR 35,000 in sales;
- the structure of the VAT number in Greece is comprised by the letters EL, which define Greece, followed by a code of 9 digits.
Please mind that the basic standard rate that is generally applicable to defibrillators is applied at a reduced rate of 6% between 31 July 2021 to 31 December 2022.
Greece still applies certain COVID related tax measures in 2023 as well, although most of the countries have renounced the tax cuts for certain services and products that benefited from tax reductions during the COVID pandemic.
Thus, it must be noted that the reduced rate of 13% charged to certain medical supplies will be maintained throughout 2023. The tax reduction was first established to be applied until 30 June 2023, but under the latest tax measures, the lower VAT of 13% will be maintained until 31 December 2023.
Please mind that Greece will also maintain in 2023 lower VAT rates for non-alcoholic drinks, transportation and certain tourism related activities. You can contact our lawyers if you want to know more on other tax measures for 2023.
Highlights of the VAT in Greece
Persons and companies that need to register for VAT can find here few important matters concerning this subject:
- Greece has been a member state of the European Union (EU) since 1981 and it applies the tax directives prescribed by the EU representatives;
- the standard VAT rate in Greece is of 24%;
- Greece also applies reduced VAT rates – there are 2 reduced rates, of 13% and 6%;
- the VAT registration procedure in Greece can take approximately 2-3 weeks, but the timeframe can increase to up to 2 months;
- VAT payers must submit VAT returns – there 2 main options, namely the monthly submission of returns (1 return per each month, resulting in 12 VAT returns per year) or quarterly submissions (1 return at the end of each quarter of 3 months, resulting in 4 VAT returns per year).
Please mind that VAT obligations can also arise in the case of natural persons; our team of Greek lawyerscan present when this can be required.
Our team of lawyers in Greece can provide more details on other obligations imposed to non-EU businesses. If you need further information, please contact our Greek law firm for tax assistance. Our team can help your register for VAT and to complete any other tax obligations.
Please contact our law firm in Greece if you need information on other legal matters. For instance, our lawyers can help you if you want to buy land in Greece. The legal framework allows foreigners to purchase land, but certain conditions have to be satisfied.
Please mind that differences can appear based on the nationality/residency of the foreigner (EU citizens benefit from simpler rules).