GREECE Law and Practice Contributed by: John C. Dryllerakis, John Papadakis and Nikos Kalantzis, Dryllerakis Law Firm
tax. Tax is generally payable upon filing of the annual income tax return. Legal entities Capital gains from the sale of shares or other deriv - atives incurred by Greek legal entities are not sub - ject to withholding tax. They are treated as business income (Article 47 (2) ITC) and taxed upon filing of the annual corporate tax return. Certain exemptions may apply, such as the participation exemption for corpo - rate shareholders holding a qualifying percentage of shares for a minimum period. Capital gains from the sale of shares or other deriva - tives incurred by foreign legal entities without a PE in Greece are not subject to Greek taxation, as they are considered business profits. Taxation arises only if the gains are attributable to a Greek PE. 3.5 Employment Income Individuals who are tax residents of Greece are taxed on their worldwide employment income, which includes salaries, wages, bonuses, allowances, bene - fits in kind and other remuneration received in respect of services rendered. The income is subject to pro - gressive personal income tax rates, currently ranging from 9% to 44%. Non-resident individuals are taxed in Greece only on employment income sourced in Greece, ie, income derived from services physically performed in Greece. An individual temporarily assigned to Greece may become liable to Greek tax if they are physically pre - sent in Greece for more than 183 days in any twelve- month period, unless a specific exemption applies. Double taxation treaties generally govern the alloca - tion of taxing rights between Greece and the country of residence or the employer, potentially providing relief from double taxation. Regarding remote work, Greek tax law does not con - tain rules specifically addressing teleworking arrange - ments. However, employment income derived from work performed physically in Greece is considered Greek-source income and is taxable in Greece, irre - spective of whether the employer is foreign. For Greek
tax residents, income from remote work with foreign employers is also fully taxable in Greece. For cor - porations, there may be permanent establishment implications if remote working arrangements create a fixed place of business in Greece, potentially result - ing in Greek corporate tax obligations for the foreign employer. 3.6 Other Income While Greece broadly follows OECD principles for employment, business profits, capital gains and pas - sive income, it also applies special taxation rules, which create exceptions to the general framework and often involve flat rates, presumptive calculations, or special regimes not explicitly covered in the OECD Model Convention. More specifically: Special Regimes for High-Net-Worth Individuals, Pensioners and Expatriates Greece has introduced special tax regimes aimed at attracting high-net-worth individuals, foreign pen - sioners and other expatriates who relocate their tax residence to Greece. These regimes provide preferen - tial tax treatment that diverges from standard OECD residence-based taxation principles. For example, qualifying individuals may be eligible for: • flat taxation on foreign-source income – certain types of income earned abroad (such as dividends, interest, royalties, or employment income) may be taxed at a fixed annual amount or a preferential flat rate, rather than being included in the standard progressive tax scale; • exemption or reduction of Greek wealth-related taxes – this can include relief from taxation on for - eign pensions or income derived from assets held abroad; and • simplified reporting obligations – certain regimes provide reduced administrative and reporting requirements for qualifying expatriates. These regimes are designed to encourage reloca - tion and investment in Greece, but they represent a departure from the OECD Model’s standard world - wide income taxation principle, as foreign-source income may be taxed at special flat rates or partially exempted.
176 CHAMBERS.COM
Powered by FlippingBook