Each taxation scale usually provides a tax free amount of income for which there is no tax imposition (tax exemption bracket). The amount of income that exceeds this amount is taxed with a progressive tax scale.

For determining the net income of every scale, a number of expenses are deducted, which are usually expenses incurred for the acquisition of the income by a certain category. Moreover, the tax authority adds the income that is received from presumed or actual expenses (expenses incurred for the purchase of a car or a house, building a house in Greece, etc), based on the relevant provisions of the Greek law (“tekmiria”).

Income received from real estate property in Greece, may have a different tax treatment.

Reductions from tax are provided, depending on various factors including the number of children that burden each taxpayer, medical expenses and expenses for hospitalisation, housing needs of the tax-payers’ children, expenses for rents and out-of school lessons etc. Foreign residents may have a different tax reduction treatment.

Despite the actual income that is declared from the taxpayer, his total income is also defined, based on his and his family’s expenses, as per the relevant provisions of the Greek Income Taxation law. The definition of the income based on the expenses, is based on the rationale that the taxpayer must justify expenses incurred by declaring respective income that he has “presumably” received (“tekmiria”).

The expenses may include:

1. presumed expenses that each taxpayer is considered to have acquired from ownership rights or use of certain assets, such as the possession of a secondary residence in Greece; possession of a private car; possession of yachts, aircrafts, etc … or
2. actual expenses, made for the acquisition of assets, allowance of loans, gifts, repayment of loans, etc.

All the above procedures for the fulfilment of the tax obligations regarding your income in Greece, can be accomplished through a limited Power of Attorney to a specialised Greek lawyer.

June 2020