Greece Tax Guide 2012

Transcription

1 Greece Tax Guide 2012

2 foreword A country s tax regime is always a key factor for any business considering moving into new markets. What is the corporate tax rate? Are there any incentives for overseas businesses? Are there double tax treaties in place? How will foreign source income be taxed? Since 1994, the PKF network of independent member firms, administered by PKF International Limited, has produced the PKF Worldwide Tax Guide (WWTG) to provide international businesses with the answers to these key tax questions. This handy reference guide provides clients and professional practitioners with comprehensive tax and business information for 100 countries throughout the world. As you will appreciate, the production of the WWTG is a huge team effort and I would like to thank all tax experts within PFK member firms who gave up their time to contribute the vital information on their country s taxes that forms the heart of this publication. I would also like thank Richard Jones, PKF (UK) LLP, Kevin Reilly, PKF Witt Mares, and Kaarji Vaughan, PKF Melbourne for co-ordinating and checking the entries from countries within their regions. The WWTG continues to expand each year reflecting both the growth of the PKF network and the strength of the tax capability offered by member firms throughout the world. I hope that the combination of the WWTG and assistance from your local PKF member firm will provide you with the advice you need to make the right decisions for your international business. Jon Hills PKF (UK) LLP Chairman, PKF International Tax Committee jon.hills@uk.pkf.com I

3 important disclaimer This publication should not be regarded as offering a complete explanation of the taxation matters that are contained within this publication. This publication has been sold or distributed on the express terms and understanding that the publishers and the authors are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication, nor for any error in, or omission from, this publication. The publishers and the authors expressly disclaim all and any liability and responsibility to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person or firm of advisors, and ensuring that such advice specifically relates to their particular circumstances. PKF International is a network of legally independent member firms administered by PKF International Limited (PKFI). Neither PKFI nor the member firms of the network generally accept any responsibility or liability for the actions or inactions on the part of any individual member firm or firms. II

4 preface The (WWTG) is an annual publication that provides an overview of the taxation and business regulation regimes of 100 of the world s most significant trading countries. In compiling this publication, member firms of the PKF network have based their summaries on information current as of 30 September 2011, while also noting imminent changes where necessary. On a country-by-country basis, each summary addresses the major taxes applicable to business; how taxable income is determined; sundry other related taxation and business issues; and the country s personal tax regime. The final section of each country summary sets out the Double Tax Treaty and Non-Treaty rates of tax withholding relating to the payment of dividends, interest, royalties and other related payments. While the WWTG should not to be regarded as offering a complete explanation of the taxation issues in each country, we hope readers will use the publication as their first point of reference and then use the services of their local PKF member firm to provide specific information and advice. In addition to the printed version of the WWTG, individual country taxation guides are available in PDF format which can be downloaded from the PKF website at PKF INTERNATIONAL LIMITED APRIL 2012 PKF INTERNATIONAL LIMITED ALL RIGHTS RESERVED USE APPROVED WITH ATTRIBUTION III

5 about pkf international limited PKF International Limited (PKFI) administers the PKF network of legally independent member firms. There are around 300 member firms and correspondents in 440 locations in around 125 countries providing accounting and business advisory services. PKFI member firms employ around 2,200 partners and more than 21,400 staff. PKFI is the 10th largest global accountancy network and its member firms have $2.6 billion aggregate fee income (year end June 2011). The network is a member of the Forum of Firms, an organisation dedicated to consistent and high quality standards of financial reporting and auditing practices worldwide. Services provided by member firms include: Assurance & Advisory Corporate Finance Financial Planning Forensic Accounting Hotel Consultancy Insolvency Corporate & Personal IT Consultancy Management Consultancy Taxation PKF member firms are organised into five geographical regions covering Africa; Latin America; Asia Pacific; Europe, the Middle East & India (EMEI); and North America & the Caribbean. Each region elects representatives to the board of PKF International Limited which administers the network. While the member firms remain separate and independent, international tax, corporate finance, professional standards, audit, hotel consultancy, insolvency and business development committees work together to improve quality standards, develop initiatives and share knowledge and best practice cross the network. Please visit for more information. IV

6 structure of country descriptions a. taxes payable FEDERAL TAXES AND LEVIES COMPANY TAX CAPITAL GAINS TAX BRANCH PROFITS TAX SALES TAX/VALUE ADDED TAX FRINGE BENEFITS TAX LOCAL TAXES OTHER TAXES b. determination of taxable income CAPITAL ALLOWANCES DEPRECIATION STOCK/INVENTORY CAPITAL GAINS AND LOSSES DIVIDENDS INTEREST DEDUCTIONS LOSSES FOREIGN SOURCED INCOME INCENTIVES c. foreign tax relief d. corporate Groups e. related party transactions f. withholding tax G. exchange control H. personal tax i. treaty and non-treaty withholding tax rates V

7 international time Zones AT 12 NOON, GREENwICH MEAN TIME, THE standard TIME ELsEwHERE Is: A Algeria pm Angola pm Argentina am Australia - Melbourne pm Sydney pm Adelaide pm Perth pm Austria pm B Bahamas am Bahrain pm Belgium pm Belize am Bermuda am Brazil am British Virgin Islands am C Canada - Toronto am Winnipeg am Calgary am Vancouver am Cayman Islands am Chile am China - Beijing pm Colombia am Croatia pm Cyprus pm Czech Republic pm D Denmark pm Dominican Republic am E Ecuador am Egypt pm El Salvador am Estonia pm F Fiji midnight Finland pm France pm Guernsey noon Guyana am H Hong Kong pm Hungary pm I India pm Indonesia pm Ireland noon Isle of Man noon Israel pm Italy pm J Jamaica am Japan pm Jersey noon Jordan pm K Kazakhstan pm Kenya pm Korea pm Kuwait pm L Latvia pm Lebanon pm Liberia noon Luxembourg pm M Malaysia pm Malta pm Mauritius pm Mexico am Morocco noon N Namibia pm Netherlands (The) pm New Zealand midnight Nigeria pm Norway pm O Oman pm G Gambia (The) noon Georgia pm Germany pm Ghana noon Greece pm Grenada am Guatemala am P Panama am Papua New Guinea pm Peru am Philippines pm Poland pm Portugal pm Puerto Rico am VI

8 Q Qatar am R Romania pm Russia - Moscow pm St Petersburg pm s Sierra Leone noon Singapore pm Slovak Republic pm Slovenia pm South Africa pm Spain pm Sweden pm Switzerland pm T Taiwan pm Thailand pm Tunisia noon Turkey pm Turks and Caicos Islands am U Uganda pm Ukraine pm United Arab Emirates pm United Kingdom (GMT) 12 noon United States of America - New York City am Washington, D.C am Chicago am Houston am Denver am Los Angeles am San Francisco am Uruguay am V Venezuela am Vietnam pm VII

9 Greece Greece Currency: Euro Dial Code To: 30 Dial Code Out: 00 (EUR) Member Firm: City: Name: Contact Information: Athens Alexandros Sfarnas a. taxes payable FEDERAL TAxEs AND LEVIEs COMPANy TAx Companies resident in Greece are subject to corporate income tax on their worldwide income and capital gains. Non-resident companies that have a permanent establishment in Greece are subject to corporate income tax on income and capital gains derived through the permanent establishment. A financial period is 12 months and usually coincides with the calendar year. In certain cases, however, it may start on 1 July and end on 30 June of the following year. Also, the financial period of a company in which a foreign enterprise has at least a 50% capital participation may coincide with that of the foreign enterprise. The tax rates applicable to undistributed profits are as follows: Public limited companies (SA) -20% Banks 20% as above Limited liability companies (EPE) 20% as above Branches of foreign companies 20% as above Distributed profits are subject to an additional income tax at 25%. Dividends paid to parent companies based in European countries are exempted from such tax. Note: Income tax is payable in eight equal monthly instalments commencing in the fifth month from the end of the financial period in which the tax return must be filed. CAPITAL GAINs TAx Capital gains are not taxed separately but are added to the company s taxable income except for the following cases: (1) Gains from the sales of shares quoted on a Stock Exchange are currently taxed at a rate of 0.15% of the sales proceeds. From 1 April 2012 these gains will be taxed in the same way as any other income. However such taxation has been postponed several times up to now. (2) Sales of shares not quoted on a Stock Exchange are taxed separately at a rate of 5% on the sale value (i.e. gross proceeds). If this income is gained by a company, the above 5% tax is considered as a prepayment and the profits are taxed as any other taxable income. (3) Profit from sales of (a) interests in any kind of company (except a public limited company), and (b) an enterprise as a whole, is taxed separately at a rate of 20%. (4) Profit from the sale of a right, relevant to the operation of the enterprise, is taxed separately at a rate of 20%. In cases (3) and (4), the profit is taxed together with other income if the seller is a public limited company. sales TAx/VALUE ADDED TAx (VAT) VAT is charged on every supply of goods and services by a commercial enterprise, with the exception of the Aghion Oros area. The VAT rate is 23%, except for specific categories of goods and services for which the tax rate is 13% and 6.5% respectively. The above rates are reduced by 30% in certain circumstances. Public services (health, education, insurance etc.) are not subject to VAT. These services are considered VAT exempt. Exports of goods and services are zero-rated. VAT is collected at each stage of the process of production or distribution of goods and services. The burden of the tax falls on the ultimate consumer. OTHER TAxEs Insurance business income is not subject to VAT but to turnover tax at a rate of 10%. Each transfer of real estate is subject to transfer tax computed on the market value of the real estate at a rate of 10%. This tax is borne by the buyer. From 1 January 2006, 1

10 Greece buildings (sale of new buildings only) are subject to VAT at 23%. Other buildings are subject to transfer tax at 10%. Taxpayers are subject to a yearly charge based on the value of real property held. Starting from 2010, the tax rates applicable to companies are as follows: Properties in general 6/1000 Buildings owned and used for the purposes of a commercial activity 1/1000 Hotels, for the business years 2010, 2011 and 2012, used for business purposes 0.33/1000 Buildings owned and used by not-for-profit legal entities 1/100 Individuals are subject to the charge on a progressive scale Transactions not subject to VAT are subject to stamp duty at rates from 1.2% to 3.6%. Companies pay contributions to the social security organisation (IKA) for their employees. The contribution is computed on the employee s salaries at a rate of approximately 30%. b. determination of taxable income Taxable profits are determined by ascertaining total gross income and then subtracting allowable expenses. These expenses must be wholly incurred for the purposes of the enterprise. Below are some of the allowed deductions. DEPRECIATION Fixed asset depreciation is computed annually at fixed rates, the most important of which are: plant and other buildings 5% 8% machinery 11% 15% furniture 15% 20%, office machines 15% 20%, computers 24% 30% or 100% private cars 11% 15%, trucks and buses 15% 20%. stock/inventory Stock is valued at the lower of acquisition cost or market value. CAPITAL GAINs AND LOssEs Capital losses are deducted from the taxable trading income. DIVIDENDs Before 2011, no tax was charged on the receipt of dividends but distributed profits were subject to corporate tax at 40%.From 2011, dividends are subject to a dividend tax of 25% and the total of the company s profits before distribution will be taxed at 20%. INTEREsT DEDUCTIONs Interest on loans is generally tax deductible. Interest on loans from affiliated companies is tax deductible only to the extent that the loan does not exceed a debt:equity ratio of 3:1. LOssEs Losses incurred in a financial year may be carried forward to be set off against profits of the following five financial years. FOREIGN sourced INCOME Foreign sourced dividends are added to the taxable income of the company. INCENTIVEs Tax incentives are given if a company makes productive investments. There are two kinds of investments: state grants and tax reliefs. The total amount of the support depends on the size of the enterprise and the geographical area. Both incentives require a decision from the related authorities. The amount allocated every year for both grants and tax reliefs is limited. c. foreign tax relief The Greek tax liability is reduced by the tax actually paid in the foreign country on which the profits arose. Relief is restricted to the amount relating to the tax suffered on the profits in Greece. 2

11 Greece d. corporate Groups There are no special tax provisions for corporate groups. e. related party transactions When income from a related party transaction, at home or abroad, is not at arm s length prices, a transfer pricing adjustment is carried out. f. withholding tax In the absence of Double Tax Treaties, withholding tax of 20% must be deducted from royalties paid to foreign enterprises or foreign persons not permanently established in Greece. Withholding tax is also deducted from interest income at the following rates: 10% on bank deposits in Euro denominated accounts 25% on any other type of interest. Double taxation agreements contain specific provisions that confine the above mentioned withholding taxes. G. exchange control According to the EU Directives, there are no longer any exchange controls. Such controls still exist for transfers of capital to non-eu countries. H. personal tax An individual is subject to income tax on his total net income in Greece and abroad. Net income sourced in Greece is taxed irrespective of the residence of the individual. Income arising abroad is taxed if the relevant individual is a resident of Greece. The tax year is the calendar year. Taxable income is established by deducting the following expenses, where applicable: - Social security contributions - Interest paid for buying a house (for the first time) - Medical care expenses. The remaining amount is taxed as follows: Income Bracket (Euro) Tax Rate % Tax per Bracket (Euro) Aggregate Income (Euro) Aggregate Tax (Euro) 5, , , , , ,000 1,420 10, ,500 26,000 3,920 14, ,900 40,000 8,820 20, ,600 60,000 16,420 40, , ,000 32,420 Over 40, The following personal allowances are available: - EUR 2, for one child, EUR 4, for two children and EUR 7, for three children - 10% of the cost of domestic rent - 10% of the cost of hospital expenses up to EUR 3, % of the cost of insurance fees up to EUR % of alimony payments up to 1, Euro. - Donations paid to the Greek State and to not-for-profit organisations on specific conditions up to 10% of the taxable income. i. treaty and non-treaty withholding tax rates Under the tax treaties which have been concluded by Greece, the residents of certain foreign countries may enjoy reduced rates of withholding taxes on interest and royalties as follows. 3

12 Greece Interest (%) Royalties (%) (1) Non-Treaty Countries: 10/25 20 Treaty Countries: Albania 5 5 Armenia 10 5 Austria 8 7 Azerbaijan 8 8 Belgium 0/10 5 Bulgaria Canada China Croatia Cyprus 10 0/5 Czech Republic 10 10/0 (3) Denmark 8 5 Egypt Estonia 10 5/10 (2) Finland 10 0/10 France 10 5 Germany 10 0 Hungary Iceland 8 10 India (7) (7) Ireland 5 5 Israel Italy 10 5/0 Korea 8 10 Kuwait 5 15 Latvia 10 5/10 Lithuania 10 5/10 Luxembourg 8 7/5 Malta 8 8 Mexico Moldova 10 8 Morocco Netherlands 10/8 (4) 7/5 (5) Norway Poland Portugal Qatar 5 5 Romania 10 7/5 Russia 7 7 Saudi Arabia 5 10 Serbia Slovak Republic 10 0/10 Slovenia South Africa 0/8 5/7 Spain 0/8 6 Sweden

13 Greece Interest (%) Royalties (%) (1) Switzerland 10 5 Tunisia Turkey Ukraine 0/10 10 United Kingdom 0 0 United States (6) 0 Uzbekistan Where the withholding tax rate on royalties is indicated as nil, no income tax is due. The withholding tax on rental payments may also be reduced under the provisions concerning royalties in various tax treaties. The text of the relevant treaty should be consulted. 2 The 5% applies to royalties paid for the use of industrial, commercial or scientific equipment. The 10% rate applies to all other royalties. 3 No tax on royalties on intellectual property. 4 8% if paid to a bank or other institution. 5 5% for copyright and film royalties. 6 Where the US resident receiving the interest is not engaged in a trade or business through a permanent establishment in Greece, the interest is exempt from tax in Greece to the extent that it does not exceed a rate of 9% pa. The exemption is not available (and the domestic withholding tax rate therefore applies) where the US corporation holds more than 50% of the voting power of the Greek payor. 7 The domestic rate applies. There is no reduction under the treaty. Grenada Currency: Dollar Dial Code To: 1473 Dial Code Out: 011 (EC$) Member Firm: City: Name: Contact Information: St George s Henry A Joseph hjoseph.pkf@caribsurf.com a. taxes payable FEDERAL TAxEs AND LEVIEs COMPANy TAx Grenadian resident companies are liable to income tax on all sources of non-exempt income wherever arising. A company is regarded as resident in Grenada if its central management and control is located and exercised in Grenada or if it was incorporated in Grenada. A non-resident company is taxed on income of a branch carrying on a trade or business in Grenada, i.e. the income arises in Grenada. The rate of tax on companies is 30%. The tax year or year of assessment is a period of 12 months commencing on 1 January in each year. Companies are assessed tax on their income that arises in the basis period. Where the company usually makes up its accounts for a period other than the calendar year, this period will be substituted for the calendar year. The company is expected to submit its tax return by the end of March or three months following the year of assessment and pay any balance of tax due. The company is required by law to make monthly advance payments of income tax based on the results of the preceding year (estimated tax). Any balance of tax is due and payable when the return is filed. CAPITAL GAINs TAx There is no income tax on capital gains secured on the disposal of capital assets. However, there is a transfer property tax of 5% of the value of property sold with or without improvement. Aliens landholding tax: for foreign company buying into local company, the foreigner pays 15% and the local pays 10%. Foreign buying into foreign: each pays 15%. There is a 1% stamp duty charge 5

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