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Corporate income tax
Greek resident corporations are liable to corporate income tax (CIT) on their taxable profits at the rate of 29% for 2006 (previously 32%) and 25% for 2007. A surcharge of 3% is imposed on the gross income of legal entities deriving their income from the leasing of buildings or land.
Capital gains
Capital gains realised on the sale of real estate are subject to CIT at the standard rate. For the purposes of calculating the gain, the deemed sale proceeds will be the higher of actual proceeds and the deemed objective value of the property, determined in accordance with the provisions of the relevant Ministry of Finance Circular.
Unrealised capital gains on the revaluation of real estate are subject to CIT at 2% (previously 5%) for land and 8% for buildings. Revaluations must be carried out every 4 years using ‘revaluation factors’ determined by the Ministry of Finance.
Property tax
Property tax is levied annually at 3% of the deemed objective value of Greek property held by resident or non-resident companies. An exemption may be available for the company if:
- it is listed on a recognised Stock Exchange; or
- its gross income in Greece from other sources exceeds its gross income from the property in question; or
- it is owned by the Greek State; or
- it is incorporated in an EU Member State and its shares are directly or indirectly owned by individuals; or
- it is a Greek company and it informs the Greek Tax Authorities which individuals own its shares.
Additionally, annual property wealth tax of 0.7% is charged on the excess of the deemed objective value over €243,600 of Greek property held on 1 January of any given year, irrespective of the residency of the owner. Exemptions may be available in specific circumstances.
Stamp duty is charged at 3.6% on gross rental income from the lease of property to a third party in return for rent, provided that a profit is being made from such leasing activities. There is no stamp duty on the sale of land or buildings.
Property transfer tax
Tax is generally levied on the transfer of shares in an unlisted Greek company at 5% on the higher of the purchase price or the deemed objective value of the shares, irrespective of the residence of the transferor.
Real Estate Transfer Tax (RETT) is generally levied on the transfer of Greek property at the rates given below. RETT is assessed on the higher of the purchase price or the deemed objective value of the property.
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€ 0 - 15,000
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9% if the property is served by a fire brigade department; 7% if not
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€ 15,001+
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11% if the property is served by a fire brigade department; 9% if not
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VAT
VAT registration is compulsory for all businesses in Greece. The standard rate of VAT is 19% (previously 18%). However, reduced rates of 9% (previously 8%) or 4.5% (previously 4%), or a reduction of 30% of any of the three rates, may apply in certain circumstances.
However, current legislation states that VAT will be charged on the supply of buildings whose construction licence is issued on or after 1st January 2006. This is a change from the previous rules under which the supply of undeveloped land or of buildings before their first occupation was exempt from VAT.
The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.
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