Greece - Taxation

The corporate income tax rate in Greece in 2002 was 35%. The profits of general partnerships (OE) and limited partnerships (EE) were taxed at 25%. A discount of 2.5% was given to companies that settled their corporate tax liability in full when they filed their tax returns. A 3% surcharge was applied to gross rental income, but the surcharge was not to exceed the primary corporate tax. Capital gains were taxed at rates between 20% and 35%.

The progressive personal income tax schedule for 2002 had six brackets: 0% on income to €6,163; 5% on the next increment of income to €8,352; 15% on the next increment to €13,359; 30% on the next increment to €23,257; 40% on the next increment to €50,028; and 42.5% on the increment of income above €50,028. There was a 5% surcharge on non-resident incomes that exceeded €5,869, but EU residents were exempt if 90% of their income comes from Greek sources. Various deductions or tax credits can be applied to taxable income for medical and hospitalization expenses; social security taxes; interest payments on home loans; and donations to charitable organizations, with special deductions for families whose income is derived primarily from their own work on agricultural enterprises. The withholding tax is 35% on interest income and 24% on royalty payments, but these are often reduced or eliminated in bilateral double tax prevention treaties, of which Greece has concluded more than 35. There is no withholding on dividend income in any case. Gift and inheritance taxes range from 0% to 60%. There is a tax of 0.7% on large estates valued at more that €176,082, and a real estate transfer tax of 11% to 13% on urban property and 9% to 11% on rural property.

The main indirect tax in Greece is its value-added tax (VAT) introduced in January 1987. The standard VAT rate in 2002 was 18%. There were also three reduced rates-0% on domestic transportation; 4% on books, newspapers and periodicals, admissions to cultural events, and some food production; and 8% on foodstuffs, the water supply, some pharmaceuticals, medical equipment, medical care and dentistry, social housing, social services, agricultural inputs, hotels, sporting events, use of sporting facilities; and waste collection and treatment-and a higher 36% rate for a few restricted and luxury goods. Excise duties are charged on tobacco, alcohol, gasoline, and automobiles.