Tax and AFM Tax Number in Greece. Income Tax in Greece.

One of the first things you should do when settling in Greece or buying property or a car in Greece is to register for a Tax number - A.F.M. (pronounced aa – fee - mee). An AFM number is required to buy a car or motorcycle, to legally rent or buy property and to legally work in Greece (for National Insurance and tax), and to open a bank account, amongst other things.

The local Greek Tax Office (Eforia) is the place to do this. An accountant or lawyer can obtain one for you or you can apply yourself in person at your local tax office. Documents usually required to obtain a Tax number (A.F.M) are: passport and a photocopy of passport, full birth certificate and a photocopy of birth certificate, plus a marriage certificate if married.

Once you have an AFM tax number you are registered with the Greek authorities and are required to submit a yearly tax return in Greece (Form E1) regardless of income or residency i.e. even if it is a nil return.

Property owners may also be required to file a property declaration (Form E9) yearly.

The tax year runs from January to December in Greece.

Tax returns are due between February and May of the following year, according to whether you file as a business or an individual.

Married persons are taxed separately in Greece and they can choose to file either single or joint tax returns.

Greek law introduces and clarifies the definition of “tax residency” as follows:

An individual is classified as a tax resident of Greece provided that: a) he maintains in Greece his primary residence or habitual abode or the centre of his vital interests or he is a consular or diplomatic employee or public servant working under a similar regime or a public servant of Greek nationality working abroad or b) is physically present in Greece for a period exceeding 183 days during a given 12-month period consecutively or sporadically for the fiscal year, during which the above 12-month period is completed. This paragraph is not applied in case that the individual spends more than 183 days only for tourist or health reasons or other private reasons.

A tax resident in Greece is liable to be taxed for their worldwide income in the Greek tax office. International tax agreements are applied for avoiding the double taxation. So the individual is liable to cover the cost of living and the imputed income, and also must collect income receipts.

When buying property, land, a car or boat on Crete.

In order to avoid paying income tax on money transferred from abroad you must obtain proof of an international bank transfer ( a pink or white slip ) from your Greek bank. Open your own bank account in Crete and make any payments in Crete from this account.

When transferring money into your Greek bank account from abroad make sure that you get a copy of the money transfer order from the Greek bank for tax purposes. This will prove where the money originated and that tax has already been paid on it.

Transferring cash to Greece

IMPORTANT RULING In the past, any important amount of cash transferred on your person could be declared to the customs authorities at your point of entry into Greece, and they could issue you a receipt. Since 24/3/08 the customs NO LONGER issue this receipt and any cash which you wish to declare to the tax authorities must always to be transferred only through a bank.

If you own a home in Greece

You must advise your accountant how many months you reside in your home each year. You must ensure that you keep the electricity bills for the last 6 years because the tax authorities can ask for them as proof of the number of months the home was closed. If you have more than one home in Greece, which is not covered by a lease contract or an EOT license you must keep a copy of the electricity bills to give to your accountant. The tax authorities check the electricity consumption in order to ascertain whether the home was rented illegally.

Income Tax - more detailed information & updates can be found here: worldwide-tax.com

Tax scale for payroll and pension income

The taxable payroll and pension income is subject to tax according to the following scale:

Income tax brackets for 2020.

Range of income € Brackets of income Tax rates

0-10,000 10,000 9%

10,001-20,000 10,000 22%

20,001-30,000 10,000 28%

30,001-40,000 10,000 36%

Over 40,001 Over 40,001 44%

Tax Credits (tax free allowance)

Only employees and pensioners who are permanent tax residents in Greece are allowed tax credits for personal expenditure. in order to qualify the transactions must take place electronically (credit or debit card or bank transfer).

Tax allowance is calculated through a mechanism that reduce the income tax as follow: for tax payers with income up to 12,000€, without a child 777€, with one child 810€, with 2 children 900€, with 3 children 1,120€, with for children 1,340€. For income more than 12,000€ the amount of tax that can be reduced is 20€ for every 1,000€ income. Only tax residents in Greece with global and Greek income taxed in Greece (despite the source of income), have the liability to pay their expenditures by Greek credit or debit cards or bank transfer in order to be eligible for the above tax allowances. The expenditures concern any daily living expenses that a family can spend, except for tax bills, loan payments, rent payments and car, boat and property purchase. Minimum worth expenditure required to be paid by Greek credit or debit card or bank transfer in order to qualify the allowance of the above tax bracket for each taxpayer is 30% of the annual income. The maximum worth expenditures that is required is 20,000€.

Non tax residents in Greece are not allowed any deductions or tax credits from their Greek income.

Special Property Duty' ENFIA is payable by all real estate owners in Greece.

The Property tax is billed by the Greek tax office yearly in July and payment can be made in up to 5 installments.

Greek Tax Office Website: www.gsis.gr

Open 8am to 1pm Monday to Friday.

Heraklion ‘A’ Theotokopoulou and Koronaiou Street ‘B’ Knossou and Natheria Street

Chania . 2nd Floor 3 Tzanakaki Street

Rethymnon Hygoum Gabriel 111

Agios Nikolaos Epimenidou 20

Website: www.gsis.gr

The information contained in these pages is for guidance only and should not be taken as tax advice. Taxation legislation changes frequently and this information may not reflect the latest changes, while tax status and liabilities differ according to individual circumstances. Always consult a Greek accountant regarding your personal tax status and obligations if you live, work or own assets in Greece.

Contributions by Tax Oasis, George & Niki Atsalakis, Accountants, Chania, Crete.

Specialists in providing tax and accounting advice to non - Greeks. www.cretanaccountant.gr

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