Doing Business in
Greece
Prepared by Prooptiki Ltd
September 2010
Country - General Information
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Strategic Link to the:
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Balkans
Eastern Mediterranean
Region
Population: 11.3 million
Working force: 4.6 million
Euro-zone since 2001
Capital: Athens
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5.5 million inhabitants
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Eastern Europe
Black Sea
Basic Economic Figures
2
1,5
1
0,5
0
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GDP growth rate
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-1.5% (Q2 2010)
-0,5
-1
-1,5
-2
Series1
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Unemployment Rate:
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11.8% (Q2 2010)
Q4 2008
Q1 2009
Q2 2009
Q3 2009
Q4 2009
Q1 2010
Q2 2010
-0,7
-1
-0,3
-0,5
-0,8
-0,8
-1,8
Major Industries
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Tourism
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15% of GDP
Construction
Telecommunications
Energy Production
Textiles
Food Processing
Shipping
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Over 4.5% of GDP
Chemicals
Tobacco
Processing
Metal Products
Mining
Petroleum
Investment Opportunities
Sectors to Invest
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Tourism
Energy
ICT
Food & Beverage
Life Sciences
Environmental Management
Investment Opportunities
Why Invest in Greece?
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Foreign Direct Investment
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Gross FDI inflows: €6.48 million (2008 data)
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Net FDI inflows: €3.46 million (2008 data)
Investment Incentives
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Investments Incentive Law
Greek Economy
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Member of the Euro-zone
Trade
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Exports grow steadily
Infrastructure
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Due to the Olympic Games 2004
Human Capital
Access to Financing & Venture Capital in Greece
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wide selection of alternatives for their financing needs
Emerging National Markets
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Southeast Europe and the Eastern Mediterranean
Labor Regulations
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Minimum Age limit: 15 years old
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Most common working hours
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5-day week
8 hour day
Minimum Wage Levels
Representative
Minimum Wage Levels
in Greece (amounts in €)
Until June 30, 2011
Labourers (daily rate)
33.04 – 45.74
Clerks (monthly rate)
739.56 – 1,020.80
July 1, 2011
Raised by the level of EU
inflation rate for 2010
July 1, 2012
Raised by the level of EU
inflation rate for 2011
Labor Regulations
Customary and Legal Holidays in Greece
January 1 - New Year's Day
Whit Monday
January 6 - Epiphany
May 1 - Labour Day
March 25 - Independence Day
October 28 - National Holiday
Good Friday
December 25 - Christmas Day
Easter Monday
December 26 - Boxing Day
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“Overwork”: 1 extra hour per day
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20% premium of the hourly wage
“Overtime”: any extra hour after “overwork”
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Up to 120 hrs a year: 40% premium
More than 120 hrs a year: 60% premium
Labor Regulations
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Employee Compensation
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Dismissal Notice
Employment
Period
Dismissal
Notice Time
Working Period
Compensation
2 months – 1 year
1 month + 1/6
1 year – 4 years
2 months + 1/6
4 years – 6 years
2 months – 2 years
1 month
3 months + 1/6
6 years – 8 years
2 years – 5 years
2 months
4 months + 1/6
8 years – 10 years
5 years – 10 years
3 months
5 months + 1/6
10 years – 15 years
4 months
10 full years
6 months + 1/6
15 years – 20 years
5 months
More than 20 years
6 months
(in the same employer)
Taxation in Greece
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Individual Taxation
Corporate Taxation
Capital Gains Taxation
Real Estate Taxation
Inheritance & Gift Taxation
Other Taxation
Individual Taxation
Income Tax Scale
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Directly connected to
the collection of
receipts of expenses
Income up to €12,000
shall collect receipts to
the amount of 10% of
the income
Income more than
€12,000 need to
collect 30% of their
income on receipts
Income Brackets (in €)
Tax Rate
0 - 12,000
0%
12,001 – 16,000
18%
16,001 – 22,000
24%
22,001 – 26,000
26%
26,001 – 32,000
32%
32,001 – 40,000
36%
40,001 – 60,000
38%
60,001 – 100,000
40%
More than 100,000
45%
Individual Taxation
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The non-taxable amount of income is increased by:
 €1,500 for individuals with one dependent child
 €3,000 for individuals with two dependent child
 €11,500 for individuals with three dependent children, increased
by €2,000 for each additional child.
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Non-residents:
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are allowed to avail of deductions and credits, if:
 they are residents of EU member states and
 90% of their worldwide income is from Greek sources.
are liable to pay taxes on their income from Greek sources.
are liable to pay a surtax of 5% on income up to €12,000; unless
they are residents of EU member states and 90% of their worldwide
income is from Greek sources.
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Individual Taxation
Bonuses
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Bonuses exceeding
10% are taxed as
follows:
Bonus
Tax Rate
Up to € 20,000
50%
€20,001-40,000
60%
€40,001-60,000
70%
€60,001-80,000
80%
Exceeding €80,000
90%
Individual Taxation
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10% withholding tax
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on accrued interest of a foreign bond or coupon
earned by Greek residents.
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EXCEPTION: Non-Greek residents having deposits in
Greek banks in foreign currency.
Individual Taxation
Deduction Expenses
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The total amount of medical expenses
Mandatory contributions to social security funds.
if the taxpayers are disabled, blind etc.
20% of the purchase price of Mutual Funds,
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if the fund is not sold for three years
the maximum deduction can be € 3,000.
Interest of loans for the acquisition of a first residence
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Max size of residence 120 m2
Max loan amount €200,000.
The contract of the loan shall have been signed until December
31, 2002.
Individual Taxation
Tax Credits
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Hospital expenses
 tax credit of 20%
 up to 6,000€ of the expenses???
Personal Insurance expenses for life health and personal accident
 Tax credit of 20%
 up to amount of € 1,200 for unmarried and €1,200 for each
spouse when the taxpayer is married.
Interest of loans for the acquisition of a first residence
 Tax credit of 20%
 Max residence size 120 m2
 Max loan amount €200,000.
 Contract after January 1, 2003.
Annual rental of the main residence and private lessons
 Tax credit of 20%
 Up to €1,200
Individual Taxation
Tax Credits
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Donation and grants to the state and non-profit institutions in
monetary sums
 Maximum of 10% on taxable income
 Each receipt shall be more than €100
Alimony
 Tax credit of 20%
 Maximum tax credit €600.
Legal advice expenses
 Tax credit of 20%
 Maximum credit of 10% of taxable income when theoretical
income is taken into account.
Installation of central A/C, natural gas, solar panels
 Tax credit of 10%
 Maximum amount of expenses € 6,000.
Individual Taxation
Rental Income
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Surtax
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Property < 300 m2
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Property > 300 m2
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1.5%
3%
This surtax cannot be higher than tax income.
Stamp Duty
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Applicable to all Buildings except Houses
3.6% of the actual rental value of the property
Corporate Taxation
According to Legal Form
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Societe Anonyme
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Limited Liabilities
Company
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General Partnership
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Limited Partnership
Corporate Taxation
SA & Ltd
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Non-distributed profits
are taxed as follows:
Fiscal Year Tax Rate
2010
24%
2011
23%
2012
22%
2013
2014
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Dividends taxation:
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40%
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21%
20%
Tax advance:
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80%
Corporate Taxation
SA & Ltd
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Capital accumulation tax
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1% on the share capital
any increases thereof
payable once upon the
registration of the company
and upon the approval of
any capital increase.
Corporate Taxation
General & Limited Partnerships
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25% tax rate on profit
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unless the partners are individuals
20% tax rate
The 3 unlimited partners with the highest participation (not
legal entities) get a «business fee» according to their
share.
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This fee is calculated on 50% of the company’s profits and is
deductible from the taxable income of the company.
The business fee is taxed at the progressive rate of the new
tax scale with other personal income.
Corporate Taxation
General Rules
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Income from immovable property
 3% additional tax rate
 This additional tax cannot exceed the tax calculated of the
company’s income.
The tax is paid in 8 equal monthly instalments
The main exceptions from the above taxation are the following:
 Profits from the operation of ships under the Greek flag by Greek
companies. Such profits are subject to specific taxation on ship
owner’s profits. When profits are distributed they are not taxed.
 Subject to reciprocity, profits made in Greece by foreign
enterprises from the operations of ships under foreign flag and
aircrafts.
Corporate Taxation
Taxable Income
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Net income
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calculated by deducting expenses and
depreciation.
Allowable deductions usually include business
expenses.
Depreciation is based on the acquisition value.
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Companies may choose the straight method or
declining method.
Corporate Taxation
Taxable Income
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Deductible expenses shall
fulfill the following criteria:
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shall relate to the business
activity.
shall be recorded in the book
entries of the year which
deduction is claimed.
shall be supported by all
necessary documentation in line
with the law.
Corporate Taxation
Tax Losses
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Tax losses may be carried forward for five (5)
consecutive years in order to be set off
against income of that time period.
Corporate tax losses generated in another
country maybe set off only against foreign
source income.
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All these losses comes from corporation’s books
and records and are in full compliance with the
“code of books and records”.
Capital Gains Taxation
Shares of Listed Companies
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For shares of companies listed into the stock
market acquired from January 1, 2011
onwards:
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20% withholding tax on capital gain for the shortterm (until 3 months) trade of shares
10% withholding tax on capital gain for the
medium-term (within 12 months) trade of shares
There is no capital gain tax in case of more
than 12 months trade of shares
Capital Gains Taxation
Shares of Non-Listed Companies
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Capital Gains
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generally regarded as ordinary income
taxed at 20% for corporations and partnerships
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Capital Gains = Selling Price - Book Value.
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Gains from the sale of parts of a limited
liability company are taxed at a flat rate of
20%
Value-Added Tax
Standard Rate
23%
Lower Rates
Newspapers, magazines,
books and theater tickets
5.5%
Goods considered to be
essential items (food,
pharmaceuticals,
transportation, electricity, etc)
11%
The rate is further reduced to 16%, 8% and 4% for taxpayers
established in the Dodecanese and in other islands of the
Aegean except Crete
Real Estate Taxation
For Individuals
Value of Property
(€)
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Tax
Rate
0 – 400,000
0%
400,001 – 500,000
0.1%
500,001 – 600,000
0.3%
600,001 – 700,000
0.6%
700,001 – 800,000
0.9%
Exceeding 800,000
1%
For years 2010, 2011 and 2012, for property value
exceeding € 5,000,000 a 2% tax rate is imposed.
Real Estate Taxation
For Legal Entities
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Tax Rate of 0.6%
 value no less than 1€/m2.
Tax Rate of 0.3% or 0.1%
 depending on non-profit making character of the
entity and the use of property.
For years 2010, 2011 and 2012
 a 0.033% tax is imposed on taxable real estate for
self-used real estate of hotel enterprises
 without applying the minimum limit of 1€/m2.
Real Estate Taxation
Transfer Tax
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This transfer tax is applicable both to
individuals and to legal entities.
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Old buildings
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All real estate transfers are subject to tax at a rate
of 8% until € 20,000 - part of sales price and 10%
for the excess amount.
New buildings
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Only VAT applicable
Inheritance and Gift Taxation
Type of Category
(based in the degree of kinship)
CATEGORY “A”
(spouse, child, grand-child, parents)
CATEGORY “B”
3rd or higher degree of kinship with the
deceased (brother, sister, step-mother,
step-father, father/mother-in-law, etc)
CATEGORY “C”
All others heirs or legatees not included
to previous categories
Taxable Scale (€)
Tax Rate
0 – 150,000
0%
150,001 – 300,000
1%
300,001 – 600,000
5%
Above 600,000
10%
0 – 30,000
0%
30,001 – 100,000
5%
100,001 – 300,000
10%
Above 300,000
20%
0 – 6,000
0%
6,001 – 72,000
20%
72,001 – 267,000
30%
Above 267,000
40%
Other Taxation
Tax on Transfer of Shares
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Listed Shares
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Listed shares on the Athens stock exchange are
subject to 0.15% tax out the transfer value until
the end of 2010.
Non-listed Shares
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Transfers of non-listed shares are subject to 5%
income tax to the relevant transfer value. This
transfer value cannot be lower the result of a
calculation according a decision issued by
Ministry of Finance.
Other Taxation
Dividends, Royalties & Interest
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Dividends
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40% tax rate
Royalties & Interest
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Greece enjoys a transitional regime
 Withholding tax on interest and royalty payments effected
between associated EU companies
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Tax rate of 5% until June 30, 2013
In case the EC Directive and DTA do not apply, withholding
tax on
 Royalties is 20%
 Interest is 40%
25% on remunerations or royalties paid to foreign
companies with no permanent establishment in Greece as
well as to foreign companies that undertake studies and
designs etc. in Greece
Other Taxation
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Service Fees
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Tax on TV Advertisements
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20% withholding tax
20% tax rate
Compensation for the interruption of the
employment relationship are subject to income
taxation as follows:
€0 – 60,000
0%
€ 60,001 – 100,000
10%
€ 100,001 – 150,000 20%
More than € 150,000 30%
Audit
Requirements
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The companies subject to audit are the
companies that for two years in a row fulfil
two (2) of the following criteria
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Total assets > €2,500,000
Annual revenue > €5,000,000
Employees > 50 (average number)
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during the accounting year
Thank you
If you need any further information,
please contact:
info@prooptikiltd.gr