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Incomes and Taxation
Understanding the Greek income tax system for EU citizens resident in Greece...
The annual earnings of salaried persons are made up of 12 monthly salaries, one additional salary as a Christmas gift, half an additional salary as an Easter gift and half an additional salary as a summer leave gift.
The earnings of employees are subject to deductions relating to:
- health insurance
- income tax payable by natural persons in proportion to income and family obligations
- old-age pension insurance
- unemployment insurance
- Low incomes from salaried services are exempt from tax
Annual personal income of €12,000 is not subject to income tax. The tax-free income allowance is €14,000 for a person with two children and €22,000 for a person with three children.
The part of the annual income of a taxpayer without family obligations between €12,000 and €15,000 is taxed at 15 percent, while from €15,000 to €26,000 it is taxed at 24 percent. Income of from €26,000 to €60,000 is taxed at 35 percent, and income in excess of €60,000 is taxed at 40 percent. A salesman or a new programmer with a gross monthly salary of €1,200 pays social insurance and pension contributions of about €192. Tax on salaried services depends on whether or not the person has dependent family members.
Value Added Tax (VAT) is payable only on purchases of goods and services.
Married couples are taxed separately, receive child allowances either from their employment or from the OAED, and are subsidised for a period of time when they acquire a third, fourth or subsequent child.
Local taxes consist of the charges levied by municipalities for sanitation services, lighting and so on. Vehicle owners pay an additional annual tax based on the age and cubic capacity of the vehicle. This tax ranges from €94 to €880 per annum.
Under EU regulations, a person who has worked in two or more EU countries is able to combine state pension contributions paid in each state in order to qualify for a state pension. It is advisable to contact the social security ministry in your own country for more information before you leave for Greece.
Text last edited on: 08/2010
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