oNew Tax Law The new tax law, nr. 4110/2013 (“Income Tax Provisions, Issues related to the Authorities of the Ministry of Finance and other Regulations”), which amends provisions of the Income Tax Code and other provisions, has already been voted by the Greek Parliament and published in Government Gazette nr. 17/A/ 23.01.2013. Indicative provisions of this law are the following:
a. A progressive tax scale is applicable to both Greek and non-Greek tax residents, with no tax free bracket, and more specifically:
For income up to euros 25.000,00 the applicable tax rate is 22%, For the part of the income from euros 25.001,00 up to 42.000,00 the applicable tax rate is 32%, For the part of income exceeding euros 42.001,00 the applicable tax rate is 42%
b. A new progressive tax scale with no tax free bracket is applicable to Private Businesses and Entrepreneurs/ Freelancers as of January 1st 2013, and more specifically:
For income up to euros 50.000,00 the applicable tax rate is 26%, For the part of the income exceeding euros 50.001,00 the applicable tax rate is 33%.
c. For new private businesses and entrepreneurs with commencement date as of 2013 onwards and for the first three (3) years of their operation, the tax rate of the first scale is reduced by 50% for income up to euros 10.000,00.
d. Rental income as well as investment income (excluding investment income taxed at source with no further tax liability) is taxed at source at the rate of 10% for income up to euros 12.000,00 and 33% for income exceeding euros 12.000,00.
e. The obligation to collect receipts (receipts issued in any European Union country will also be acceptable) remains and is stipulated that the amount of receipts required are set to 25% of the taxable income for each individual. The maximum amount of receipts required is set to euros 10.500,00.
f. All individuals who on 1 January 2013 own property rights on plots beyond the city plans are required to review their real estate property as shown on the site of General Secretariat of Information Systems by 30 June 2013, in order to make any appropriate amendments
g. The income tax return is submitted from February 1st up to June 30th of the fiscal year it relates to and up until the opening business hour of the public services of the following day of the day the deadline expires.
h. The income tax scale for legal entities is increased from 20% to 26%. General partnerships (OE), limited partnerships (EU), civil societies engaged in business or profession, civil or non profit companies, joint or invisible companies and joint ventures that do not maintain double-entry books are taxed for income up to euros 50.000,00 at a tax rate of 26%. The excess is taxed at a tax rate of 33%. When the above do maintain double entry books their total net income is subject to tax at a rate of 26% and an additional tax of 10% applies in case of profit distribution.
i. The withholding tax rate on dividends and profits that are capitalized or distributed by Greek SA companies to Greek or foreign individuals or legal entities, associations or groups of assets which will be approved by general meetings after 1 January 2014 is reduced from 25% to 10%. When a Greek SA company proceeds to distribution of profits and in its revenues include profits from its participation in another legal entity, the portion of the tax that has already been withheld and corresponds to the distributed profits is deducted from the tax that the company must pay.
j. The withholding tax rate on income from interest on deposits and REPOS etc., is increased from 10% to 15%, for interest to be paid from 1 January 2013 onwards. Moreover, the tax on interest from bonds which arise after 1 January 2013 regardless of the time of issuance of the bonds is increased to 15%.
k. Capital gains arising from the transfer of real estate acquired after 1 January 2013 which is further transferred for consideration are taxed with a tax rate of 20%. Such capital gains tax exhausts the tax liability.
l. A tax on luxury living is imposed to the amount of annual imputed income arising from the ownership or use of private cars with large engine power, airplanes, helicopters and swimming pools. A tax rate of 5% applies on the amount of annual imputed income for cars of 1 929cc to 2 500cc, whilst the respective rate is increased to 10% for private cars exceeding 2 500cc. For the remaining items (e.g. airplanes, helicopters and swimming pools), a tax rate of 10% applies. The tax on luxury living is applicable to income reported on the annual tax returns of fiscal year 2014 onwards.