One of the first things you should do when you decide to settle in Greece, or
buy property, is register for a Tax number (A.F.M. – pronounced aa – fee -
mee).
An AFM number is required to buy a car or motorcycle, to rent or buy property
and to legally work in Greece (for National Insurance and tax), 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:
Tax Returns
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, i.e. even if it is a nil return. Property owners must also
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.
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 a 'pink 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 and a 'pink
slip' from the Greek bank for tax purposes. This will prove where the money
originated and that tax has already been paid on it.
Transferring money to Greece - IMPORTANT NEW 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.
Failure to follow this process will result in taxation on deemed or notional
income arising mainly from the usage and acquisition of certain specific assets
(ownership and acquisition cost of property, private automobile, recreation
boats, aircrafts, swimming pools, secondary residence, family expenditure
etc), and from the payment back of loans.
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.
New Property Tax
As of 01/01/2008 property holdings are subject to a real estate tax. The tax is
assessed on all property owners (individuals or legal entities). The taxable
value is calculated on the basis of certain predetermined factors that are set
by the tax office and depend on location, age, etc. of the property (‘objective
value’). These factors are subject to revision every one or two years. The tax
applies at a rate 0.1% or 1 euro per square meter of the home, whichever is
the highest. Land that is located outside of the village is exempt from the tax.
The new bill says that property tax (ETAK) will apply to all properties beyond
one's primary residence, provided the latter is not larger than 200m2 or not of
a value larger than 300,000 euros.
Tax Brackets for 2009 (Income 2009 for 2010 Tax return)
Brackets of income Tax rates
1-10,500 ** 0% *
10,501-12,000 15%
12,001-30,000 25%
30,001-75,000 35%
Over 75.001 40%
* If you are registered as non resident for tax purposes in Greece, tax is
payable at 5 % on the first 10,500 euros of any income in Greece.
** If the income concerns salaries or pension the first bracket is 1-12,000 and
the second bracket is removed.
Gross income produced from the lease contract of a home (without having
setting up in business in the tax office and without having E.O.T. license) is
subject to a further 3.6 % stamp tax and 1.5% additional tax.
Tax on swimming pools
Swimming pools are considered luxury goods. You are obliged to declare the
following annual deemed or notional income (irrefutable presumption)
according to the square meters of the swimming pool:
25-60 sq. m.: 11,600 euro, 60-120 sq. m.: 29,200 euro, more than 120
sq. m.: 46,800 euro.
An example: If you have a swimming pool for private use (size 25-60 sq.m.)
and fail to obtain ‘pink slips’ of 11,600 euro each year the tax that you will pay
is approximately 700-800 euro per year. To avoid paying the tax you can
transfer 11,600 euros to your Greek bank and obtain pink slips then purchase
almost anything that you wish. Except that you cannot use the 11,600 euros
to purchase assets such as a property, car, boat, swimming pool or to pay
back a loan.
If you have set up a rental business in the tax office the swimming pool is
considered for business use. In this case it is not necessary to transfer the
11,600 euros (you don’t pay any tax because the swimming pool is used for
business, which is taxed differently).
New Tax Rules for 2010
The new tax bill will go through parliament in March 2010. An outline of the bill
follows.
Collecting Receipts
New tax rules for 2010 will include the need to retain and declare receipts for
purchases between January 1st and December 31st 2010, in order to obtain
the full tax free allowance on income (see table below for tax scales).
A percentage of receipts must be collected and retained for all those declaring
over 6,000 euros of income.
For those declaring an income of 6,000 to 12,000 euros, the percentage of
receipts required is 10% in order to earn their full tax free allowance.
E.g. someone earning 12,000 euros will be required to produce 1,200 euros
worth of receipts.
For those declaring over 12,001 euros, the percentage of receipts required is
30%. e.g. someone earning 20,000 euros will be required to produce 6,000
euros of receipts in order to keep the first 12,000 euros tax free.
If receipts are not produced, or if the total of receipts is less than the
stipulated amount, then tax will be applied at 10% on the missing portion.
E.g. on an income of 15,000 euros, receipts of 30% required = 5,000euros. If
the receipts produced = only 4,000 euros then tax will be applied at 10% on
the missing 1000 euros of receipts.. i.e 100 euros tax.
There are also small tax incentives in the higher tax brackets for those who
produce more than 30% in receipts.
Types of Receipts
Collect normal till receipts, showing the date, amount and AFM (tax) number of
the business.
Tax Brackets for 2010 (Income 2010 for 2011 Tax return)
0 - 12,000 Euros 0 %
12,001 -16,000 Euros 18 %
16,001 -22,000 Euros 24 %
22,001 -26,000 Euros 26 %
26,001 -32,000 Euros 32 %
32,001 -40,000 Euros 36 %
40,001 -60,000 Euros 38 %
more than 60,000 40 %
INCOME TAX From the British Embassy's 'Notes on Greece '..
Income tax is payable by all persons having income arising in Greece, regardless
of nationality or place of residence. The total income acquired in the immediately
preceding financial year is subject to income tax after the deduction of allowances
and exemptions provided for. There is a bilateral taxation convention between the
United Kingdom and Greece whose object is to avoid double taxation and the
prevention of fiscal evasion with respect of taxes on income, however, according
to the Convention, persons are obliged to submit their tax declaration to the local
tax authorities IN THEIR COUNTRY OF RESIDENCE** irrespective of where his/her
income arises. For example: a pensioner living in Greece on his/her U.K. pension
must submit a declaration to the local Greek Tax Office. The Ministry of Finance
will then, upon request, issue certificate for use with the UK Tax Authorities
stating that the pensioner in question has been taxed in Greece. More
information can be obtained from the Board of Inland Revenue, Somerset House,
London S.W.2, and locally from the Greek taxation authorities or Ministry of
Finance.
**or country of DOMICILE. Tax status can be complicated and a Greek
accountants advice may differ to that stated above by the British Embassy.
Always consult a Greek accountant regarding your tax status
and obligations if you live, work or own assets in Greece.
The above information is liable to change as taxation legislation changes
often.
Thanks to George & Niki Atsalakis, Accountants www.cretanaccountant.gr
for their contribution to this page.
buy property, is register for a Tax number (A.F.M. – pronounced aa – fee -
mee).
An AFM number is required to buy a car or motorcycle, to rent or buy property
and to legally work in Greece (for National Insurance and tax), 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
- birth certificate and a photocopy of birth certificate
- marriage certificate if married
Tax Returns
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, i.e. even if it is a nil return. Property owners must also
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.
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 a 'pink 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 and a 'pink
slip' from the Greek bank for tax purposes. This will prove where the money
originated and that tax has already been paid on it.
Transferring money to Greece - IMPORTANT NEW 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.
Failure to follow this process will result in taxation on deemed or notional
income arising mainly from the usage and acquisition of certain specific assets
(ownership and acquisition cost of property, private automobile, recreation
boats, aircrafts, swimming pools, secondary residence, family expenditure
etc), and from the payment back of loans.
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.
New Property Tax
As of 01/01/2008 property holdings are subject to a real estate tax. The tax is
assessed on all property owners (individuals or legal entities). The taxable
value is calculated on the basis of certain predetermined factors that are set
by the tax office and depend on location, age, etc. of the property (‘objective
value’). These factors are subject to revision every one or two years. The tax
applies at a rate 0.1% or 1 euro per square meter of the home, whichever is
the highest. Land that is located outside of the village is exempt from the tax.
The new bill says that property tax (ETAK) will apply to all properties beyond
one's primary residence, provided the latter is not larger than 200m2 or not of
a value larger than 300,000 euros.
Tax Brackets for 2009 (Income 2009 for 2010 Tax return)
Brackets of income Tax rates
1-10,500 ** 0% *
10,501-12,000 15%
12,001-30,000 25%
30,001-75,000 35%
Over 75.001 40%
* If you are registered as non resident for tax purposes in Greece, tax is
payable at 5 % on the first 10,500 euros of any income in Greece.
** If the income concerns salaries or pension the first bracket is 1-12,000 and
the second bracket is removed.
Gross income produced from the lease contract of a home (without having
setting up in business in the tax office and without having E.O.T. license) is
subject to a further 3.6 % stamp tax and 1.5% additional tax.
Tax on swimming pools
Swimming pools are considered luxury goods. You are obliged to declare the
following annual deemed or notional income (irrefutable presumption)
according to the square meters of the swimming pool:
25-60 sq. m.: 11,600 euro, 60-120 sq. m.: 29,200 euro, more than 120
sq. m.: 46,800 euro.
An example: If you have a swimming pool for private use (size 25-60 sq.m.)
and fail to obtain ‘pink slips’ of 11,600 euro each year the tax that you will pay
is approximately 700-800 euro per year. To avoid paying the tax you can
transfer 11,600 euros to your Greek bank and obtain pink slips then purchase
almost anything that you wish. Except that you cannot use the 11,600 euros
to purchase assets such as a property, car, boat, swimming pool or to pay
back a loan.
If you have set up a rental business in the tax office the swimming pool is
considered for business use. In this case it is not necessary to transfer the
11,600 euros (you don’t pay any tax because the swimming pool is used for
business, which is taxed differently).
New Tax Rules for 2010
The new tax bill will go through parliament in March 2010. An outline of the bill
follows.
Collecting Receipts
New tax rules for 2010 will include the need to retain and declare receipts for
purchases between January 1st and December 31st 2010, in order to obtain
the full tax free allowance on income (see table below for tax scales).
A percentage of receipts must be collected and retained for all those declaring
over 6,000 euros of income.
For those declaring an income of 6,000 to 12,000 euros, the percentage of
receipts required is 10% in order to earn their full tax free allowance.
E.g. someone earning 12,000 euros will be required to produce 1,200 euros
worth of receipts.
For those declaring over 12,001 euros, the percentage of receipts required is
30%. e.g. someone earning 20,000 euros will be required to produce 6,000
euros of receipts in order to keep the first 12,000 euros tax free.
If receipts are not produced, or if the total of receipts is less than the
stipulated amount, then tax will be applied at 10% on the missing portion.
E.g. on an income of 15,000 euros, receipts of 30% required = 5,000euros. If
the receipts produced = only 4,000 euros then tax will be applied at 10% on
the missing 1000 euros of receipts.. i.e 100 euros tax.
There are also small tax incentives in the higher tax brackets for those who
produce more than 30% in receipts.
Types of Receipts
Collect normal till receipts, showing the date, amount and AFM (tax) number of
the business.
Tax Brackets for 2010 (Income 2010 for 2011 Tax return)
0 - 12,000 Euros 0 %
12,001 -16,000 Euros 18 %
16,001 -22,000 Euros 24 %
22,001 -26,000 Euros 26 %
26,001 -32,000 Euros 32 %
32,001 -40,000 Euros 36 %
40,001 -60,000 Euros 38 %
more than 60,000 40 %
INCOME TAX From the British Embassy's 'Notes on Greece '..
Income tax is payable by all persons having income arising in Greece, regardless
of nationality or place of residence. The total income acquired in the immediately
preceding financial year is subject to income tax after the deduction of allowances
and exemptions provided for. There is a bilateral taxation convention between the
United Kingdom and Greece whose object is to avoid double taxation and the
prevention of fiscal evasion with respect of taxes on income, however, according
to the Convention, persons are obliged to submit their tax declaration to the local
tax authorities IN THEIR COUNTRY OF RESIDENCE** irrespective of where his/her
income arises. For example: a pensioner living in Greece on his/her U.K. pension
must submit a declaration to the local Greek Tax Office. The Ministry of Finance
will then, upon request, issue certificate for use with the UK Tax Authorities
stating that the pensioner in question has been taxed in Greece. More
information can be obtained from the Board of Inland Revenue, Somerset House,
London S.W.2, and locally from the Greek taxation authorities or Ministry of
Finance.
**or country of DOMICILE. Tax status can be complicated and a Greek
accountants advice may differ to that stated above by the British Embassy.
Always consult a Greek accountant regarding your tax status
and obligations if you live, work or own assets in Greece.
The above information is liable to change as taxation legislation changes
often.
Thanks to George & Niki Atsalakis, Accountants www.cretanaccountant.gr
for their contribution to this page.
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| Copyright 2004-2010 Carol Palioudaki. Greece Tax AFM. www.livingincrete.net |
| Living in Crete |
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| Tax & Tax Number AFM |
| Greek Tax And Tax Number AFM |
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