Greece regulatory round-up: May 2016

A new package of tax measures passed by the Greek parliament includes changes in social security contributions and increases in income tax rates and the solidarity contribution.

The new package of tax measures and pension reforms was published in the National Gazette on Thursday 12 May 2016. The changes affect legal entities, employees, freelancers and pensioners.

New tax rate for individuals

- valid on income gained from 1 January 2016

 

  • Taxable income from employment, pensions and farmers is subject to tax in accordance with the following scale:

 

Gradual income (euro)
Tax rate %  Incremental Tax (euro) Total Income (euro)  Total Tax amount (euro)
0 - 20.000
22 4.400
20.000
4.400
20.001-30.000
29 2.900  30.000
7.300 
30.001-40.000  37  3.700  40.000  11.000
 
40.000-  45       

The resulting tax shall be reduced by €1,900 for individuals without children and income of not more than €20,000. The tax deduction amounts to €1,950 for individuals with one child, €2,000 for individuals with two children and €2,100 for individuals with three children.

If the applicable tax is less than the amounts mentioned above, the reduction confines itself to the corresponding tax. For taxable income that exceeds €20,000, the decline is reduced by €10 per each €1,000 of taxable income. Note: The above deduction does not apply for freelancers.

 

  • Solidarity contribution withheld 

 

 As per the following, new, scale:

Income (euro) Rate %
0-12.000  0,0 
12001-20.000  2,2 
20.001-30.000  5,0 
30.001-40.000  6,5 
40.001-65.000  7,5 
65.000-220.000  9,0 
220.001+  10,0 

 

  • Dividend 

 

The withholding tax rate on dividends increases to 15% (from 10%).

 

  • Rental income

 

Rental income is now taxed as follows:

Income  Tax rate % 
0 - 12.000
15 
12.001 – 35.000  35 
35.001-  45 

  • Νew tax rate on profits of personal companies (OE, EE etc.)

 

Α single tax rate of 29% now applies regardless of the amount of profit.

 

  • Social Security Contributions 

 

The Social Security Contribution increases by 1% (0.5% for employers and 0.5% for employees) from 1 June 2016 until 31 May 2019 and by 0.50% (0.25% and 0.25%) from 1 June 2019 until 31 May 2022.

 

Talk to us

Our experts in Athens are closely monitoring all regulatory changes in Greece and can assist businesses with interpretation of the current, ever-changing situation and new laws.

Need more information? Get in touch with Yannis and his team.

Find out more about our Accounting and Tax services worldwide.

Keeping up to date

You can now receive our insights and regulatory updates direct to your inbox by choosing the topics and jurisdictions that most interest you. 

Subscribe to our e-Alerts.