United States-Greece Tax Treaty
Greece International Tax Compliance Rules
Quick Summary. Greece (Ελλάδα, Hellada or Hellas)sits on the Mediterranean Sea in Southeastern Europe. Officially the Hellenic Republic (Ελληνική Δημοκρατία, Elliniki Dimokratia), Greece’s government is a parliamentary republic. Its structure is set forth in the Constitution of Greece, its fundamental charter, which was adopted by the Fifth Revisional Assembly in 1975 and last amended by the Greek Parliament in 2008.
In 2019, Greece implemented several amendments to its Income Tax Code, including a corporate income tax rate reduction, reduced dividend withholding tax rates, and a participation exemption for certain capital gains. The amendments also reduced bracketed rates for individuals and certain exemptions for non-residents from income, inheritance, and gift taxes.
Greece is a member of the North Atlantic Treaty Organization (NATO), European Union (EU), and the European Economic and Monetary Union in 2001.
U.S.-Greece Tax Treaty
Currency.
- Euro (EUR)
Common Legal Entities.
- Corporation (SA)
- Limited Liability Company (EPE)
- Private Company (PC)
- General Partnership (OE)
- Limited Liability Partnership (EE)
Tax Authorities.
- Ministry of Finance
- Public Revenue Independent Authority
Tax Treaties.
- Greece signed the OECD multilateral instrument (MLI) on 7 June 2017
Corporate Income Tax Rate.
- 24% rate for earned income applied to generally all legal entities in Greece.
- 29% rate applied o Greek credit institutions and Greek branches of nonresident credit institution if they are subject to “deferred tax asset” recognition provision for all relevant fiscal years.
Individual Tax Rate.
- Up to EUR 10,000 – 9% rate
- EUR 10,001 – 20,000 – 22% rate
- EUR 20,001 – 30,000 – 28% rate
- EUR 30,001 – 40,000 – 36% rate
- Over 40,001 – 44% rate
Corporate Capital Gains Tax Rate.
- 24% rate (taxed as ordinary business profits)
Individual Capital Gains Tax Rate.
- 15% rate applied to gains arising from the sale of securities and derivatives.
Residence.
- Corporation – A company is considered a resident under Greek law if the company is incorporated under Greek law or the company has its registered seat in Greece or its place of effective management in Greece at any time during the tax year.
- Individual – An individual is considered a resident under Greek law if the individual is present in Greece for more that 183 days within any 12-month period. Individuals are also considered a resident if their center of vital interests in in Greece.
Withholding Tax.
Dividends.
- 5% dividend withholding tax for both residents and nonresidents unless the rate is reduced by an applicable tax treaty or exemption.
Interest.
- 15% withholding tax rate on interest payments for residents and nonredisents.
Royalties.
- 0% withholding tax rate on royalties paid for resident companies.
- 15% withholding tax rate on royalties paid for resident individuals, and nonresident individuals and companies.
Transfer Pricing.
- Transactions between related parties must be carried out on arms-length terms.
- Greece allows the following transfer pricing methods.
- Comparable uncontrolled price
- Cost plus
- Transactional net margin method
- Resale price
- Profit split
CFC Rules.
- Greece has implemented the CFC rules based on the EU anti-tax avoidance directive (ATAD).
- The undistributed passive income from affiliates of a foreign subsidiary satisfying certain conditions will be attributed to and taxed in the hands of the Greek resident controlling shareholder.
- The application of the CFC rules results in the taxation of “deemed” income as business profits.
Hybrid Treatment.
- Inbound dividends at the level of a Greek parent entity may be tax exempt under the EU parent-subsidiary directive but only to the extent that the relevant income is not treated as a tax-deductible expense (e.g., interest) at the level of the payer/subsidiary.
Inheritance/estate tax.
- Close Relatives – 1-10% range levied on the “tax value” of real estate after the deduction of a tax-free amount, which varies on the taxpayer’s relationship with the deceased.
- Other heirs – 0-40% range of applicable rates.
Tax Treaty Network – International Tax Attorneys
Our international tax expertise allows us to guide clients through tax planning and compliance so that they can focus on what matters most. At Freeman Law, our clients are engaged in an interconnected business environment that spans across the globe. From supply chains to markets, cross-country taxation impacts every global business.
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