In Greece, employers are obligated to make substantial social security contributions for their employees. These contributions are typically divided between the employer and the employee.

Social Security Contributions

Employers contribute to several areas:

• Pension Insurance: Employers contribute approximately 13.3% of the employee's gross salary toward pension insurance (26.95% total). Contribution ceilings apply.
• Health Insurance: Employers contribute roughly 7% of the gross salary to health insurance (13.87% total), with contribution ceilings.
• Unemployment Insurance: Approximately 1.65% of the gross salary is paid by the employer (3.9% total), with ceilings applied.
• Other Contributions: Additional smaller contributions may apply, such as for labor accident insurance (varying rates based on the risk of the job).

Calculation and Payment

Employers are responsible for withholding the employee's share of the social security contributions from their salary and then remitting both their own and the employee contributions to the responsible tax authorities, usually the e-National Social Security Fund (e-EFKA). Contributions are made on a monthly basis.

Important Notes

Social security contribution amounts are capped at specific income ceilings. These ceilings are adjusted periodically. In some specific regions of Greece, temporarily reduced social security contribution rates may apply.

Other Employer Obligations

Employers need to register with the appropriate Greek authorities, including the e-EFKA. It's essential to maintain accurate payroll and tax records.

In Greece, a progressive income tax system is used, meaning that your tax rate increases as your income rises. Tax brackets and rates are adjusted periodically. Income tax is withheld directly from your salary by your employer throughout the year (PAYE system) and remitted to the tax authorities.

Social Security Contributions

As an employee in Greece, you are required to contribute to various social security funds:

• Pension Insurance: You contribute approximately 13.65% of your gross salary.
• Health Insurance: Your contributions are roughly 6.87% of your gross salary.
• Unemployment Insurance: You contribute around 2.25% of your gross salary.
• Small Additional Contributions: Smaller deductions might occur for contributions like labor accident insurance.

Solidarity Contribution

The Solidarity Contribution is an additional tax imposed on higher income earners in Greece. The rates and income thresholds for this contribution change periodically.

Itemized Deductions

Limited itemized deductions exist, and are usually applied when filing your annual income tax return. These could include:

• Alimony Payments: Under specific conditions.
• Charitable Donations: To specific approved organizations.

Tax Returns

You are generally required to file an annual tax return in Greece to calculate your final tax liability and determine any refunds or additional taxes owed.

The standard VAT rate in Greece is 24%, which applies to most services supplied within the country.

Reduced VAT Rates

Greece applies reduced VAT rates to specific services:

• Reduced Rate 13%: This rate applies to services such as restaurants, catering, certain cultural services, passenger transport, hotel accommodation, and some medical supplies.
• Reduced Rate 6%: This rate applies to a limited range of services, including pharmaceuticals, books, newspapers, and theater performances.

VAT Exemptions

Certain services are exempt from VAT in Greece, including financial services, insurance services, educational services (from approved institutions), medical and healthcare services, and rental of residential property (under specific conditions).

VAT Liability

• Registration Threshold: Businesses exceeding a specific annual turnover threshold (currently €10,000) generally must register for VAT.
• Charging VAT: VAT-registered businesses are responsible for charging VAT on their services, collecting it from their customers, and filing regular VAT returns with the tax authorities.

Place of Supply Rules

The place of supply rules determine where a service is deemed to be supplied for VAT purposes, which is important for establishing whether to charge Greek VAT.

• General Rule: The place of supply for services is typically where the supplier belongs (i.e., has their business establishment).
• Specific Exceptions: There are special rules for services related to immovable property, electronic services, and others.

Intra-Community Supplies

• B2B Supplies: For services provided to businesses in other EU countries, specific rules apply. Intra-Community supplies of services are generally zero-rated for VAT purposes in Greece. However, the customer in the other EU country usually accounts for VAT under the reverse charge mechanism.

Invoicing Requirements

• VAT Invoices: Businesses must issue proper VAT invoices to their customers containing specific information like the VAT rate applied, VAT amount charged, and the business's VAT registration number.
• Record-Keeping: Detailed records of transactions and invoices must be maintained for auditing purposes.

Greece offers a variety of tax incentives to stimulate business growth and attract investment. These incentives can be particularly beneficial for companies in specific sectors or locations.

Investment Law

The Investment Law is a central framework offering various incentives depending on the nature and size of the investment. It includes 13 thematic schemes covering areas like:

• Digital transformation
• Environmental initiatives
• Research and development
• Tourism
• Manufacturing

The level of support can range from tax exemptions to subsidies for regional expenses. The maximum aid can reach €10 million, with increased limits for certain types of aid such as tax exemption.

Regional Aid

The level of state aid for regional development projects varies depending on the investment location and company size. Less developed areas offer higher aid percentages (15% to 80%) on regional expenses compared to more developed regions.

Other Tax Incentives

• Tax exemption for reinvested profits: Companies can reinvest a portion of their profits into the business without incurring corporate tax.
• Tax deduction for angel investors: Individuals investing in startups can deduct 50% of their contribution from their taxable income (up to €300,000).
• E-invoicing benefits: Businesses adopting e-invoicing enjoy a temporary grace period with a 30% margin for deviation from pre-filled VAT amounts.

It's important to stay updated on the latest tax incentive programs and eligibility criteria. Consulting with a tax advisor familiar with Greek regulations is recommended for navigating the specifics and maximizing potential benefits.