Greece

*Updated July 2020*

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• Legal System
• Inheritance and succession
• Estate planning
• Taxation
• Residence and domicile
• Other relevant information

Legal system

Civil law.

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Inheritance and succession

Succession

Hereditary law is primarily regulated in the fifth book of the Greek Civil Code (the Code). Testamentary freedom exists under the condition that the heir is not deprived of their right to inherit one-half of their intestate part of the inheritance (forced heirship). Disinheritance is permitted in specific cases.

Family law and defined inheritance rules

Yes. Family law is regulated in the fourth book of the Code and family relationships are identical to all other legal systems deriving from Roman Law. Inheritance rules cover both testate and intestate succession, in which case the law foresees six categories of heirs:

i) Children.
ii) Parents and siblings.
iii) Grandparents and cousins.
iv) Great-grandparents.
v) Surviving spouse (if with heirs of the first class, inherits one-quarter of estate, if with following classes inherits one-half of the estate, if inherits alone, the whole estate).
vi) The Greek State, if no other relative exists.

Probate process

According to Greek Law, a will/testament may take place in one of the following three manners:

• Handwritten (private) testament: the testator writes the testament and keeps it at home for the heirs to find after death.
• Secret testament: the testator writes the testament and gives it to a notary public for safeguarding; even the notary public is unaware of its contents.
• Public testament: the testator dictates their testament to the notary public in the presence of either three witnesses or a second notary public and one witness.

Mental capacity

Determination of an adult person’s incapacity to legally transact takes place under the strictest procedural rules before the Chamber first instance court after an application is filed by whomever is lawfully entitled thereto (children, spouse, etc.), or the District Attorney. The court appoints the incompetent person’s guardian. All respective legislation is in the Code.

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Estate planning

Use of trusts in estate planning

The trust is an unknown concept in Greek law. The only concept that is remotely comparable is a rarely used trust legacy, if someone wants to give a life-long donation or benefit to a physical or legal entity (mostly used with non-profit organisations).

Use of foundations in estate planning

Foundations are not very common in practice, with the exception of enormous real estate property (e.g. Onassis Foundation), mostly because of the high bureaucratic requirements for the establishment of a foundation, which must be performed by presidential decree.

Types of entities

Personal companies are the sole proprietorship, general partnership and limited general partnership, in which the named partners bear all responsibility for the debts of the company, and their private property is also liable.

Capital companies:

• Shareholders’ companies (AE): shareholders are liable for company debts only up to the sum of their participation to the company capital. Executory members of the board of directors are also personally liable for debts in regards to the state, taxes or social security contributions. (Principal legislation: Law 2190/1920). There is a new law in force from January 2019 (Law 4548/2018). The most important change is that shares have to be registered to a name and may no longer be anonymous. It is a harmonisation with the Fifth Anti-Money Laundering Directive.
• Limited liability companies (EPE): partners are only liable for company debts, up to the sum of their participation to the company capital, whereas company administrators are also personally liable for the company’s obligations towards the state. (Principal legislation: Law 3190/1955). New legislation has been in force since January 2019 (Law 4541/2018). The changes are not material.
• Private capital companies (IKE): newly established institution (since 2012), functions like the EPE, without the respective formalities of publications set forth by the law, without the need to notarise documents, etc, and the company may be established with only EUR1 as company capital. A very flexible institution, personal work or even warranty for the company towards a banking institution may be considered as participation to company capital (which must not be only money or assets, as in the other cases). (Principal legislation: art.43 ff. of Law 4072/2012).

Other legal entities are Code organisations and foundations and the civil corporation, which are of absolutely no significance in business matters.

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Taxation

Income tax system

Tax residents in Greece are taxed on their worldwide income (dependent also on double taxation agreements). Territory dependent income e.g. from real estate property, dividends from Greek corporations, etc. is always taxed in Greece, whereas real estate property is always subject to Greek taxes irrespective of proprietor’s tax residence.

Personal income tax rates

Current status for 2020 incomes of individuals, employees, pensioners and freelancers (sole proprietorship) according to Law 4472/2017. Cooperative contribution imposed in the total income from all sources (for individuals): 

Income category (EUR)	Tax rate
0-10,000	9%
10,001-20,000	22%
20,001-30,000	28%
30,001-40,000	36%
40,001+	44%

Current status for individual employees and pensioners with calculated tax reduction under art.16, linked with the number of dependent children of the taxpayer: 

INCOME (EUR)	TAX	Tax reduction (by number of children)				Final Tax payable (by number of children)
		0	1	2	3 and more	0	1	2	3 and more
8.636,35	1.900	1.900	1.950	2.000	2.100	0	0	0	0
8.863,65	1.950	1.900	1.950	2.000	2.100	50	0	0	0
9.090,90	2.000	1.900	1.950	2.000	2.100	100	50	0	0
9.545,45	2.100	1.900	1.950	2.000	2.100	200	150	100	0
10.000	2.200	1.900	1.950	2.000	2.100	300	250	200	100
20.000	4.400	1.900	1.950	2.000	2.100	2.500	2.450	2.400	2.300
30.000	7.300	1.800	1.850	1.900	2.000	5.500	5.450	5.400	5.300
40.000	11.000	1.700	1.750	1.800	1.900	9.300	9.250	9.200	9.100
50.000	15.500	1.600	1.650	1.700	1.800	13.900	13.850	13.800	13.700
60.000	20.000	1.500	1.550	1.600	1.700	18.500	18.450	18.400	18.300
70.000	24.500	1.400	1.450	1.500	1.600	23.100	23.050	23.000	22.900
80.000	29.000	1.300	1.350	1.400	1.500	27.700	27.650	27.600	27.500
90.000	33.500	1.200	1.250	1.300	1.400	32.300	32.250	32.200	32.100
100.000	38.000	1.100	1.150	1.200	1.300	36.900	36.850	36.800	36.700
150.000	60.500	600	650	700	800	59.900	59.850	59.800	59.700
200.000	83.000	100	150	200	300	82.900	82.850	82.800	82.700
210.000	87.500	0	50	100	200	87.500	87.450	87.400	87.300
215.000	89.750	0	0	50	150	89.750	89.750	89.700	89.600
220.000	92.000	0	0	0	100	92.000	92.000	92.000	91.900
230.000	96.500	0	0	0	0	96.500	96.500	96.500	96.500

Real estate income taxation for property owned by physical person (taxed independently):

Income category (EUR)	Tax rate
12,000	15%
35,000	35%
35,001	45%

Cooperative contribution imposed in the total income from all sources (for individuals): 

income (EUR)	Solidarity contribution (per cent)
0-12,000	0%
12,001-20,000	2.2%
20,001-30,000	5%
30,001-40,000	6.5%
40,001-65,000	7.5%
65,001-220,001+	9%
<220,000	10%

This is an extra taxation imposed to total incomes to help the government to pay benefits to poor and unemployed people.

Corporate income tax rate

For Greek shareholders’ companies (SA), EPEs, private companies, foreign companies’ subsidiaries, general and limited partnerships: 25 per cent.

Capital gains tax rate

If derived by companies, capital gains are generally taxed as income. If derived by physical persons, capital gains tax (CGT) rates range from 0 to 20 per cent, depending on the nature of the gain. Interest, shares, bonds and derivatives are 15 per cent; royalties are 20 per cent.

Non-residents are taxed in Greece exactly as residents in regards to real income gained in Greece of whichever nature.

Individuals claiming to be foreign tax residents must submit their tax residence certificate from the respective state or a copy of their income tax return or the tax declaration submitted to the foreign state. Should the aforementioned not be submitted or not be submitted in time, then the individual is considered a tax resident of Greece and is subject to taxation in Greece for their global income.

Withholding tax rate (non-treaty)

• Dividends: The tax rate for dividends decreased from 10 per cent to 5 per cent for dividends distributed as of 1 January 2020.
• Interest: 33 per cent if paid to a foreign entity; 20 per cent if paid to a foreign individual.
• Royalties: 25 per cent (reduced to 20 per cent as of 1 January 2014).
• Remittance of branch profits: 25 per cent (reduced to 10 per cent as of 1 January 2014).

The above withholding tax rates may be reduced or eliminated under an applicable double taxation treaty or the provisions of the relevant EU Directives (EU Parent – Subsidiary Directive, EU Interest and Royalties Directive).

Withholding tax rate (treaty)

Refer below

Taxation at death

Estates are taxable in Greece under applicable succession and donation tax legislation. The applicable tax rates are progressive and depend on the degree of kindred of the beneficiaries and the deceased.

Other taxes

The publication of Law 4334/2015, Law 4336/2015 and Law 4389/2016 in the gazette of Greece made significant changes regarding VAT rates, among others, in different kinds of services and products, specifically:

• The standard VAT rate is 24.
• The VAT rate is decreased from 6.5 per cent to 6 per cent on medication, medicines and vaccines, books and children’s books, newspapers and printed magazines, whether or not illustrated or advertisements, tickets for various shows.
• The VAT rate is increased from 6 per cent to 13 per cent for hotel services, energy, water supply and certain food items.
• The VAT rate is increased from 13 per cent to 23 per cent for food items, supermarkets, catering services, restaurant services, hospital services and ticket fares on transports.
• The VAT rate of 13 per cent is imposed for private education.

Dividend tax rate

Dividends of foreign corporations are going to be taxed on the basis of a 5 per cent tax rate if payable to a Greek tax resident in 2020 (for the fiscal year 2020).

Tax treaties

Greece has signed 58 tax treaties.  www.gsis.gr/gsis/info/gsis_site/ddos/b.html

Tax information exchange agreements

Greece signed the OECD Convention on Mutual Administrative Assistance in Tax Matters on 22 February 2012.

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Residence and domicile

Special rules on becoming resident

Stay and work permits are obligatory for all foreigners, even for EU Member State citizens, in which case the Greek state may not deny same.

For third-country citizens, the work and stay permits are very bureaucratic and time-consuming, and are only permitted in specific cases. One has to prove, for example, employment by a Greek employer, marriage to a Greek citizen, establishment of a Greek corporation or an installation of a foreign corporation in Greece under Law 89/67, etc.

The Golden Visa programme introduced one of the most affordable In the EU Schengen Area. It requires an Investment of EUR250,000 in local real estate. A resident permit of five years is issued and renewed for all family members. Permits allow applicants to incorporate business in Greece but not to work.

Special rules on ceasing residence

A stay permit may not be granted or renewed if it is proven before a Greek court that documents provided or declarations made were partially or totally false or fraudulent.

A residence permit may be revoked if the immigrant is condemned to an incarceration penalty of over one year and in several other particular criminal cases set forth by the law, or is deemed to pose a threat to the state or to public order.

Domicile concept for gifts and inheritance

Greek nationality takes precedence, otherwise the nationality with which the deceased had stronger relations is considered.

Taxation of holdings by non-residents on death and of gifts

Gifts: 1.2 per cent for the first category (spouse, children, grandchildren and parents) and 2.4 per cent for the second category (great-grandchildren and further descendants, great-grandparents and further ascendants, siblings, further cousins, step-fathers and mothers, offspring from previous weddings, in-laws) set forth in art.29 of Law 2961/2001. 

Death: same as above.

Reporting/auditing requirements

Yes. 

• All financially active individuals and/or entities must keep accounting books according to the Greek ‘general accounting plan’, which differs significantly from other known practices in this matter and makes the employment of a Greek accountant practically obligatory.
• Annual income tax returns for both individuals and legal entities.
• Periodical VAT returns.

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Other relevant information

Asset protection laws

No.

Foreign currency restrictions

No.

Foreign ownership restrictions

No.

AML/due diligence and other requirements and regulatory procedures for advisors

• To establish a trust: not applicable.
• For incorporation: not applicable.
• To open a bank account: banks need to know the individual owning the majority of stock of any foreign corporation in order to open a bank account.

Key resources for further information

PUBLICATIONS

• Regarding the very fluid tax system, a very good source of information is www.taxheaven.gr

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STEP branches in Greece

STEP does not currently have any branches in Greece. Other branches in this region include:

• STEP Cyprus
• STEP Italy
• STEP Malta

Firms in Greece

Find firms in Greece using the Firm Search: Search now

Members in Greece

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