Greece is an increasingly popular expat destination. And why not? With fabulous ski resorts, the beauty of the Greek Islands, the rich history exciting nightlife, Greece is a country not to be overlooked. If you move to Greece, however, there will be some financial impact to your expatriates tax. We have outlined the top 8 things you need to know about your Greece taxes for expats!
1. Income Tax: Greece and How working Abroad ImpactsUS Expatriates
Americans living in Greece, or in any other country, must file US expat tax returns each year. The US also requires that you include all worldwide income on your expat tax return, including any income that is also subject to income tax in Greece.
While you are taxed on your worldwide income, there are several important deductions and credits available to help offset your income tax. There are a few ways to avoid dual-taxation that you may qualify for:
- Foreign Earned Income Exclusion (FEIE)
- Foreign Tax Credit
- Foreign Housing Exclusion
If you meet either the Physical Presence test or the Bona Fide Residence test you can exclude up to $107,600 of your 2020 foreign earnings on your US tax return (and $108,700 in 2021). The Foreign Housing Exclusion was created to help offset the higher cost of living overseas. This exclusion allows you to deduct a certain amount of your living expenses—the actual amount is tied to the current year’s FEIE, as well as where you are living.
The Foreign Tax Credit reduces your US tax dollar for dollar on what you pay in taxes to Greece. Your Foreign Tax Credit will be limited to only those earnings which are subject to US tax. That means that any Greek tax on your excluded Greek earnings (excluded by the FEIE, the Foreign Housing Exclusion, or because of Greek tax rules) will not be included in the calculation of your US Foreign Tax Credit.
2. Who is a Resident of Greece?
You are considered a resident of Greece if you are present for at least 183 days in a calendar year or have a habitual abode in Greece.
3. Is Foreign Income Taxed Within Greece?
Residents are taxed on their worldwide income while non-residents are only taxed on the income sourced in Greece.
4. Greece: Tax Rates
Greece tax rates are progressive and based on total income, ranging from 22% to 45%.
Greece Income Tax Brackets
|€12,000 and Under||0.00%|
|€12,000 to €16,000||18.00%|
|€16,000 to €22,000||24.00%|
|€22,000 to €26,000||26.00%|
|€26,000 to €32,000||32.00%|
|€32,000 to €40,000||36.00%|
|€40,000 to €60,000||38.00%|
|€60,000 to €100,000||40.00%|
|€100,000 and Up||45.00%|
5. US – Greece Tax Treaty
The US – Greece tax treaty is in existence, which will help you avoid dual-taxation.
6. Americans Living in Greece: Filing US Taxes Abroad
Tax returns are due by March 1 for the previous calendar year. The actual filing date may be slightly different, as the annual Ministerial Decisions assigns dates based on classification of the taxpayer and the last digit of their tax ID number. You may receive a 1.5% discount if you owe taxes and remit in one lump sum payment. Married individuals file a joint return but each spouse is taxed separately on his/her share of the income.
7. Social Security
Employees in Greece must contribute approximately 16.5 % to the social insurance fund. Because of the US-Greece Totalization Agreement you will not be required to pay into the Social Security systems in both countries. You should speak to your employer or a tax professional to clarify where you will be taxed.
8. Other Greece Taxes for Americans Abroad
The Value Added Tax (VAT) is imposed on the sale of goods, the provision of services and the supply of new buildings—this VAT is 23%. Certain taxpayers may qualify for a reduced rate of 13% and a super reduced rate of 6%. For close relatives there is an inheritance/estate tax of 1% to 10% which is levied on the ‘tax value’ of the real property after the deduction of a tax-free amount. For other heirs, the applicable rates range from 0% to 40%. Capital gains are taxed at a rate from 0% to 20%, depending on the type of gain and Greece taxes for Americans abroad.
Need More Advice About Expatriates Tax While Living in Greece?
If you are an American living in Greece and have additional questions about Greece taxes for experts, please contact our expert CPAs and IRS Enrolled Agents.