Living in Greece

Income tax rates & receipts in Greece

February 12, 2010 at 08:00 ·

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All that this will do is create a black market in receipts, whose value will be set by the potential cost to those taxpayers without sufficient receipts. How will it reduce the black economy? Answer: it won’t, it will either be neutral or increase it. How will it help the state budget? A: it won’t.

The problem of the greek economy is that it doesn’t produce goods for export — and of the few that it does, they are hard hit by the high price of the Euro. Equally, imports are cheap for greeks so the balance of trade is very bad for the greek economy, since the imports are of consumer products and not raw materials for production purposes. An intelligent person might conclude that the problem of the Greek economy is membership of the Eurozone, rather than non-payment of taxes.

Hopeless.

In my opinion this system will only tax those with lower incomes and those who are trying to save their money. Apart from food and clothes (to a limited extent), the rest of the “expenses” that are supposed to account for 10-30% of income are frivolous purchases that not everyone needs, wants, or can afford to make.

Furthermore, the fact that only expenses that are spent within Greece can be claimed doesn’t take into account the poor quality of goods and services and are available here.

Kat Reply:
February 18th, 2010 at 19:05

It’s a bit unfair that someone earning 12,050 needs to come up with 30% in receipts, when he/she could have earned a tad less and only produced 10%.

Hardworking people who earn their own money agree with what you’re saying about quality and competitiveness. My friends and I often turn to vendors outside Greece because, even with shipping and handling, top quality items cost less and there’s more variety and better service.

People haven’t grasped that all of us pay for the sins of self-interest. And economically, Greece has a long-term problem beyond crisis mode because it fails to innovate, has some of the highest export/import fees in the EU and manufactures nothing, as FMS said above.

I welcome input from my readers, but let’s remember that this is an informative article and I expressed no opinion. Please keep to respectful discussion.

Bel: I won’t publish your last comment because there was no reprimand. If my comment was aimed specifically at you, I would have attached it accordingly. I did not.

I think readers forget that this is my website, and people hold me responsible for everything. If you look at other objective articles I wrote, I was called names and personally attacked for being biased even though the data wasn’t mine and opinions belonged to readers.

FMS says that the problem with the Greek economy is not the non-collection of taxes, but low exports. I don’t see it as an ‘either/or’ situation: there can be more than one problem with the Greek economy, y’know, and indeed there are many. So many that my head could explode just thinking about it all.

Low exports and lack of innovation are indeed amongst them. And Greek membership of the eurozone? Well, it’s had its pluses and minuses; I’d say it’s a close-run thing.

But to suggest that non-payment of taxes isn’t a problem for the Greek economy, and that suggesting so is ‘stupid’, is bizarre. It is definitely a problem and I’ve never up until now known anyone to suggest otherwise.

Unfortunately, unless the Greek mentality undergoes a significant (and admittedly quite improbable) transformation, then taxation will continue to be evaded, people will still give jobs to their mates, museums will still close mid-afternoon and Greece will remain the second-rate has-been that it is now.

(NB Despite my pseudonym, I am Greek.)

Bel: the fact that nobody else shares my opinion does not deter me in the least. The issue of non-payment of taxes is peripheral, and since 1997 the greek state has collected its revenues perfectly adequately, although with income distributional effects that are appalling — that is, with the poor paying far too much and the rich very little. Furthermore, non-payment of taxes is rather a symptom of the general problem of illegality, corruption and patronage in Greece.

So, did Papandreou deal with the real issues in these tax changes? No, not at all. Did he implement workable measures? No, not at all: who is going to check all of these receipts? Nobody will. Overall, it is a stupid policy.

Insofar as membership of the Euro is concerned, it has been an unmitigated disaster. All of the expected problems for a mismatched economy in a currency union were exhibited by Greece since joining: that is, inflationary pressure above the regional norm (concealed by lies), high unemployment of young people, declining competitiveness across all economic sectors, and interest rates that are set too low because of being in the Euro. Your reactions, as were all Greek economists and politicians at the time of joining, have nothing to do with reality and everything to do with Greeks feeling that they “have the right” to be in the Euro. Economics doesn’t work like that: that sort of sentiment is merely political.

So, I stand by my comments. The underlying social and structural causes of the Greek economy’s failings have still not been addressed even in outline. Who is talking about removing lifetime jobs from malakes who do nothing? Who is discussing the pension system that pays pensions double or triple their wages to a minority that retires even at 48, while the majority receives pensions below subsistence level? Who is discussing the dependency ratio and how either Greeks need to retire at 70+ or you will need mass immigration for enough workers to support the retired and also pay the healthcare costs?

Whatever residual disagreement I have with you regarding tax collection and euro membership is eclipsed entirely by my agreement with your last paragraph. Hear, hear and well said.

My readers are the bomb!

if this ridiculous receipt policy goes ahead and they make a nation effectively into accountants wasting their lives writing down lists or receipts with AFM of companies, I will claim illiteracy
‘I can’t read or write guy’

i agree completely, Niko. Something else I didn’t mention before, but it absolutely central to this debate: in my experience, Greek shops are the most law-abiding in the EU with regard to issuing apodeixi. In both Britain and Austria, where I go frequently, many shopkeepers seem to be unable to issue the correct receipts (deliberately, of course). The troublemakers in Greece with receipts are the following: doctors (and their so-called fakelaki, which actually should be called parcels); dentists; building contractors; periptera (which are not even required to issue them in law); and taxi drivers.

My Greek wife and myself want to do a small Classical tours business in the peloponnesus. I am an EU citizen and we do have a villa on the sea on the Patras/Corinthian Gulf. Small groups would stay with us and do trips out to Delphi etc

We imagine running a low profile business bringing in say 30-40,000 euros a year in a five to six month season.

Our accountant ( also used when building the villa) painted a sad picture of all sorts of payments. We had to ask ourselves ‘is it worth it?’ Surely there are tax allowances for each of us as Directors of our small concern. Is the first 12000 euros free of tax for both of us and are our VAT payments for food, petrol etc taken into account before tax?

Also since this is a cultural venture is there any help/remittance to attract people to Greece and show them the ‘real greek experience?’

Sean

Kat Reply:
September 11th, 2010 at 01:22

Answer to your first question about the tax-free threshold and VAT in Greece is above. Your accountant should have been able to easily answer this question.

No matter how you label it — cultural venture, “real Greek experience” (are there “fake Greek experiences”?) — it’s a for-profit business in tourism. The Greek National Tourist Organisation does 12 million in advertising to attract tourists, as mentioned in “Kalimera.” If you’re looking for something more, keep in mind that the Greek economy is in dire straits, and the government raised our taxes twice this year and is not in a position to be gratuitous.

Because your wife is Greek, she should be able to read Greek news or do research on available subsidies, grants or loan programs in Greece for small businesses.

Hi Kat! Amazing work on the website, the breadth and depth of the topics you cover is truly remarkable. I have frequently directed friends from outside Greece to livingingreece.gr for all their questions, everyone has found the information very valuable so thank you – you have saved me a huge amount of time!

It’s the first time I’m posting here and I was wondering if you could provide your insight on GR income tax.

I’m Greek, living in Greece mostly, but I travel a lot – almost as much as you did And I’m staying in the US or countries in Asia for 2-3 months at a time. I’m working as a freelance IT consultant for companies around the world. So my work doesn’t physically take place in Greece.

My objective is to not be liable to pay tax in Greece, and since I only stay in Greece 5-6 months a year, I was wondering if I could make this happen. Is there a “non-domicile tax status” test that I could pass? I’ve seen “183 days” mentioned in a few websites but I’m not sure if it applies to GR as well. Some friends suggested that I look into getting residency in Monaco by renting a small studio there, so I could be liable for income tax there, instead of Greece.

Would I have to renounce my Greek citizenship to do that? And I guess I would also have to see if Monaco has a double-treaty taxation with Greece for income tax, right?

Kat Reply:
October 26th, 2010 at 01:31

Hi George,

As I say in the first section of this article and all my tax articles, it’s best to direct questions to an accountant on tax matters because laws change often, guessing gets people into trouble, and I’m not a tax expert. I only dispense practical information. I also have no insight on this matter because: a) I’m not a Greek citizen; b) I’m happy to pay my taxes in Greece or the USA; and c) I intentionally chose an accountant who does everything straight.

Double taxation treaties only mean that a person is not obligated to pay tax in both countries, that paying tax in one country suffices in satisfying the other. I do not see where the 183 days would apply to you since being a Greek in Greece or abroad obligates you to pay tax no matter where you earned your income, just as being an American earning income in Greece, the USA or anywhere obligates me to pay tax.

I recommend finding an adept Greek accountant and taking a look at Monaco’s official government portal: http://www.gouv.mc/devwww/wwwnew.nsf/HomeGb

Thank you so much for introducing yourself and your kind words. Because I do not advertise, most of my readers come randomly through providing solid content or by word of mouth, so recommending me to so many people is much appreciated.

All best.

Hi Kat

I love your site, I am going to apologize in advance if this has been covered elsewhere. I moved to greece from the states in 2010. I am both a greek and US citizen. I am trying to figure out how to declare taxes as I have not found work yet in greece. Do I have to show how I support myself as I have no income in the US either. I see that you noted above you have an accountant that is straight, if here in greece would you mind giving me there info. Via email of course.

Thanks again and keep up the great work

Follow-up: Thanks Kat. Understand completely, I really appreciate the info. Also if I come across anything that I learned I will post or inform you.

Kat Reply:
March 15th, 2011 at 00:38

Hi Paul,

As I’m sure you’re aware, tax laws were overhauled last year and I’m terribly uncomfortable dispensing any answers on the subject because of it. What I can tell you is there are many circumstances under which you are obligated to file a tax statement, i.e., If you own, bought or inherited property (house, car, boat, etc.), collect rent, sell farm products. So yes, I do recommend finding an accountant to be sure.

I’d love to give you a name. But because this is Greece and your expectations may be different than mine, I cannot assume responsibility for what happens should your experience be less than stellar. I hope you are empathetic and not offended by what I’m saying.

I sure appreciate your kind words, and I hope this website can continue to help or entertain you in the future. All my best, K

Follow-up: Thank you for your understanding and willingness to give back. Hope to see you again.

We will not be filing our receipts electronically via an e-form but we do wish to record our receipts on an Excel spreadsheet at home.

Does anyone know of a template that might be available on line for this purpose ?

Many thanks,

Kat Reply:
March 16th, 2011 at 00:50

Hi,

I don’t know of an online template, but I created my own based on the information the Greek tax office requires: Date, Name of Business, Business/Owner’s AFM, Description of Items purchased, Amount Spent in Euros.

Thanks for your question.

Your website is a Godsend for me (and probably any foreigner) living in Greece. Thank you so much.

My question: (I am a resident here, I have a pension from IKA & TAMPY. Tax seems to be deducted from source). How do I calculate my ‘receipts’ for Greece, when (for example) last year I spent about 5 months out of the country? Is there a pro-rata rate for people who don’t live here 100% of the time? No way I can justify the minimum for the year, so do I get a partial exemption? Or maybe the Government didn’t think about such things?

My dream of living in and enjoying Greece after paying social security all these years, not to mention the work and sacrifice I made to achieve this, seems to be crumbling away very quickly.

Appreciate your knowledge on this subject.

By the way, last year I employed one of the so-called professional accountants to fill in my tax declaration forms for me, my wife and kids. They did it wrong, didn’t declare a car that was easily spotted on the previous years declaration which was showed to him and now we not sure how to get that back on the declaration. So my point is, those professionals, are not that professional at all. Like a lot of services here in Greece.

Thanks in advance for any advice.

Cheers/G

Kat Reply:
April 12th, 2011 at 23:26

Hi George, nice to see you again.

Calculation of receipts is based solely on income, not the amount of time you spend in the country. You are considered a permanent resident of Greece if you spend at least 185 days here. If there are exceptions to the rule, only an expert on tax laws can answer that question definitively.

No profession or industry in any part of the world is 100 percent competent, which is the reason I recommend asking for recommendations, screening several people and choosing one. Different people can have different experiences with the same person.

At least half my visitors/commentators are Greek, so this website helps and is intended for everyone.

Thank you for the work you are doing. It is a godsend.

Can tax receipts for the appropriate categories of sales be counted if they are for purchases made outside Greece, but in other EU countries?

Kat Reply:
May 8th, 2011 at 01:08

In the circular, it says that only receipts with readable AFMs (Greek tax numbers) are acceptable, so I have the impression that receipts cut outside Greece are excluded. If they were acceptable, you’d need to have them all translated into Greek and this would cost money.

Again, I am not a tax expert or accountant, and this is the first year we’re following new procedures so I have no first-hand experience in submitting them. We’re all first-timers.

Therefore, you need to consult the eforia for a definitive answer.

Hi Kat. You may remember me from the Military Service section. My husband and i live in Ireland. He is an Irish citizen and has never been a Greek citizen but has a Greek AFM. He pays income tax in Greece on a small inheritance shared with the rest of his siblings which yields income. My question is do we need to be keeping receipts etc or are non-resident non-citizens exempt? The accountant did not ask for anything for 2010. As of recent years we usually only spend 3-4 weeks a year here though we are hoping to spend longer next year.

Kat Reply:
August 9th, 2011 at 18:12

Hello again!

Because you do not live here at least 185 days a year, you are not obligated to keep receipts and submit them with your tax filing.

Thanks for your question, and always nice to hear from you.

Hi

I’m stuck in a matter of taxes.
My only connection to Greece is through my fathet who was born there. Myself, I’m not a Greek citizen. I have never lived or worked there, only visited for holidays. I also have inherited (about 15 years ago) a small appartment, that doesn’t yield any income. So I was very surprised when I recieved a letter asking me to pay tax based on “Prost. Diafora Dapanon”. The sum I was asked to pay was 150 E for this year, and 82:50 in advance for next year. I don’t really understand what kind of tax this is, but surely some mistake must have been made. I’ve been trying do get in touch with DOY over the phone, but without any success. Any suggestions on how to go about it do get it sorted out? I don’t have the possibility to go to Greece in person.

Many thanks
Dino

Kat Reply:
October 25th, 2011 at 06:35

A lot of taxes have been levied by the Greek government these past months to raise money for the economy — extra taxes on salaries, pensions, food, drink, boats, vehicles, swimming pools, businesses and properties. I wouldn’t assume it’s a mistake.

I’d love to help you, but asking me to tell you what the bill is for based on the little information you gave, and without the possibility to look at it, is like asking a doctor to diagnose an unknown illness over the phone. Therefore, the only thing I can suggest is asking the tax office, an accountant familiar with Greek taxes or the Greek consulate/embassy nearest you.