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VAT Registration in Greece
Updated on Wednesday 15th March 2023 Rate this article
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Greece is a country that has a tax system which follows the European Union (EU) model.
This also refers to the value added tax (VAT), which is one of the ways through which the Greek institutions collect funds from taxable goods and services sold on the Greek market.
VAT registration in Greece is compulsory for a wide category of services and goods providers, which will be presented in this article. It is worth knowing that if you want to open a company in Greece, you will be required to register for VAT purposes, following the national tax laws.
Our specialists in company formation in Greece can present the main tax obligations you will have in this case.
| Quick Facts | |
|---|---|
| We offer VAT registration services | yes |
| Standard rate | 24% |
| Lower rates | 13%, 6%, 0% |
| Who needs VAT registration | all companies with their business address registered in Greece have to apply for a VAT number / the same applies to those operating through a permanent establishment or to companies involved in intra-community trading
|
| Time frame for registration | approximately 2-3 weeks |
| VAT for real estate transactions | 24% for new properties sold for the first time |
| Exemptions available | available for sectors such as: health, social welfare, financial services, education, culture, insurance |
| Period for filing | last day of the following month (for both monthly and quarterly filing) |
| VAT returns support | yes |
| VAT refund | available for individuals and companies |
| Local tax agent required | Yes, it is required. The tax agent has to be a resident in Greece. |
| Who collects the VAT | Internal Revenue Service |
| Documents for VAT registration | the appropriate registration forms, which vary based on the nature of the applicant and other documents required by the law (personal identity documents for natural persons, and corporate documents for companies) |
| VAT number format | the country's code (EL), followed by 9 characters |
| VAT de-registration situations | possible when a company stops its operations in Greece, the company is still active, but it no longer supplies taxable goods and services |
How can foreign companies register for VAT in Greece in 2023?
Foreign companies which are registered in other EU member states and which will sell goods and services in Greece will have to obtain a Greek VAT number.
Please mind that the foreign company does not have to complete the process of company formation in Greece in order to be able to develop commercial activities here.
Instead, the company should complete the formalities for VAT registration in Greece, which implies that the foreign legal entity must apply for a VAT number in Greece and appoint a local tax representative.
The tax representative is a person who has the residency in Greece and who is in charge of handling all the tax formalities on behalf of the company.
The tax representative will have as main responsibilities submitting the company’s VAT returns as per the reporting rules applied in this country, as well as paying any other tax liabilities that the company will create through its activity in this country.
For this, businessmen can rely on our team of consultants in company formation in Greece, who can be appointed as the tax representatives of the foreign business.
The same obligations are also imposed to companies that are not tax residents of any of the EU states (obtaining the VAT number in Greece, appointing a tax representative and paying the tax as per the applicable tax legislation).
What are the VAT obligations for foreign companies in Greece?
In this section, our team of specialists in setting up a company in Greece will present information the obligations of foreign companies selling goods in this country.
As a general rule, all foreign companies, regardless if they have a permanent establishment in Greece or not, are required to conclude various VAT procedures.
This means that they will need to apply for a VAT registration number in Greece and they must pay VAT accordingly, as well as to submit VAT returns when required.
For foreign companies, the Greek law does not prescribe a minimum annual threshold for the taxable amount, but the law imposes a threshold for foreign companies which develop online sales operations.
In the latter case, the obligation to obtain a Greek VAT number and to pay the VAT is imposed when the company reaches a turnover of EUR 35,000.
For all other companies, the obligation to be registered for VAT purposes in Greece must be concluded prior to starting the business operations on the Greek territory.
Obligation to register for VAT for Greek-based entities
Since foreign companies also have VAT obligations in Greece when they sell goods or services on the Greek territory, the same will apply to businesses registered in Greece.
All legal entities have to conduct various tax registration procedures during the process of company formation in Greece. According to the law, the obligation to register arises as a direct consequence of selling goods and/or services on the Greek territory.
This is why all companies must obtain a Tax Identification Number (TIN) and then, a VAT Identification Number. The tax law in Greece states that such companies must be registered in the Tax Register.
The obligation is maintained for companies which benefit from the right to VAT exemption – for this, the company will be entitled to deduct the said tax, but it still is required to conclude the registration steps.
It also applies to Greek businesses that want to sell goods outside of the Greek territory.
Once the company becomes operational it will mandatory to submit tax returns in accordance with the applicable law. The tax returns can be submitted on a monthly or quarterly basis.
However, there are exemptions from submitting VAT returns. This applies to the following categories of entities:
- companies that benefit from the special tax regime of Article 39 of the VAT Code (applicable to small-sized enterprises);
- entities regulated by the Article 41 of the VAT Code (farmers).
Tax reporting for flat-rate tax payers in Greece
Certain entities are not required to complete their tax reporting obligations in accordance to the rules applicable to most of companies. This applies only to small-sized businesses that have fewer activities, and which are organized following a very simple structure.
For these, tax reporting obligations do appear, but they benefit from a special regime, known as flat-rate tax payment. This system stipulates that businesses do not have to submit VAT returns on a monthly or quarterly basis. Instead, they can complete their reporting obligations every 6 months.
The right to a simplified tax reporting system applies to the following:
- small businesses involved in fishing and sponge fishing (Laws 1320/1998, 1120/1999, 1102/2004);
- vessel operators developing their activities in Ioannina Lake (Law 1065/2007);
- businesses which have operations with horse-drawn vehicles (Law 1114/200).
Please mind that this rule does not apply to those who have set up a corporate structure, such as a limited liability company. It can apply, however, to entities operating as: 1) joint ownerships, or 2) civil associations and of course, to natural persons who develop a business in their own name.
When can a business in Greece apply for the special regime?
The obligation to register for VAT in Greece appears when the business starts operating (of course, it not required to do so from the 1st business day, but there is a limit to that).
For entities that benefit from the special regime, the obligation to register for VAT in Greece appears in a period of 30 days since the beginning of the activity. The special tax regime will be maintained for a period of 5 years.
Obligation to register for intra-Community related activities
Intra-Community activities refer to many business operations carried out at the level of the European Union (EU), between businesses registered in the EU, selling or receiving goods or services.
When an entity based on Greece is involved in the acquisition of goods from other countries, located in the EU, VAT obligations will arise. The obligation to register for VAT in Greece will arise in accordance with the rules of the Article 11 of the VAT Code.
Our team of consultants in company registration in Greece can provide more information regarding this procedure.
When should an entity register for VAT in Greece in 2023?
There are numerous scenarios that can determine the need to register for VAT. One of them is when one starts the process of company registration in Greece, as companies registered here are generally liable to the payment of VAT, unless an exemption is granted in specific circumstances.
The registration for VAT implies that the company will be issued with a Greek VAT number.
However, not only those who open a company in Greece can be liable for the payment of this tax. Companies registered in other states can become VAT payers in Greece in the case in which they will sell goods and services to Greek customers.
This obligation is extended to online companies as well. In the list below, our team of consultants in company formation in Greece has prepared a presentation on the main VAT payers:
- • the need to have a Greek VAT number and, thus, to register for VAT, is applied to those who buy and sell goods in Greece;
- • entities that import goods from outside the EU also need to register;
- • entities selling goods from Greece to customers outside Greece must also pay VAT;
- • the purchase of goods from the EU is also subjected to VAT;
- • e-commerce activities where goods are bought by Greek customers are charged with the VAT, once a certain threshold is achieved.
What are the VAT rates in Greece?
Once a company will receive a VAT registration number in Greece, it will have tax obligations in accordance with the applicable law.
The amount of VAT to pay will be calculated depending on the tax rate charged to the types of services and products that the company will sell in Greece. Currently, the following apply:
- • if you are setting up a company in Greece that provides goods and services included in the general list of goods and services, you will be charged with a tax rate of 24%;
- • certain activities, such as accommodation or the sale of basic food products, are charged with the reduced tax rate, of 13%;
- • according to the Government of Greece, taxable entities can also be charged with the super-reduced tax, imposed at a rate of only 6%;
- • these 3 tax rates are charged at lower rates in specific Greek regions – thus, the 24% is charged at a rate of 17%, the 13%, at a rate of 9% and the 6%, at a rate of 4% in few Greek islands (Kos, Samos, Lesbos, Leros, Chios);
- • the latter tax regulation was established under the Decision A. 1272/2020, the 30% reduction VAT regime.
What are the main VAT exemptions in Greece in 2023?
If you want to open a company in Greece, as a general rule, you will be charged with the VAT for the supply of goods and services on the Greek territory. However, there are exemptions from this rule.
They can apply only to certain business activities; for instance, businesses in the insurance and the financial sector can benefit from tax exemptions in certain cases.
The same applies for those involved in education, health or culture fields. The rules for tax exemptions on the VAT are prescribed by the VAT Code, Article 22(1).
When referring to this matter, there are 2 main situations when tax exemptions apply: 1) for services that are in the benefit of general interest of population and 2) for financial services or property ownership change.
In Greece, the VAT applies to the sale of properties only when the property is sold for the first time to a new owner. Other than this, this tax will not be charged.
The tax exemption is also applicable for the supply of services of the Hellenic Post Office. The VAT is not charged for radio and television services, but it refers only to the supply of such services.
With regards to those who want to open a company in Greece that operates as a radio post or a television post, it must be noted that the VAT will still be charged for the broadcast of materials which are of commercial nature.
By this, the law refers to commercial advertising and to broadcasting rights. These are taxed with the VAT as the radio or television companies will generate an income. The rules that apply in this case are in accordance with the Circular no. 4336/3162/Eyk.10/10.71987.
The tax exemptions apply to commercial operators that provide medical care services. The rule is applicable for hospitals and medical care centers and it takes into consideration the supply of services and of goods.
Please mind that in this case the VAT exemption applies based on specific rules, and our consultants in company registration in Greece can be of assistance if you want to invest in the medical industry.
For instance, medical centers that provide services intended for aesthetic purposes do not benefit from a VAT exemption on the services and products and they will be taxed with the standard VAT rate, of 24%.
This is done in accordance with the rules of Circulars No 1100/2010 and 1178/2018.
Once a company is a VAT payer, it must submit specific tax returns, in accordance with the accounting requirements that are imposed to local businesses.
Thus, companies have to comply with the Greek requirements for issuing invoices, credit notes and maintaining accounting documents.
For more details concerning this matter, we invite you to contact our team of specialists in Greek company formation, who can offer information on other VAT regulations available here.
Please know that under the Budget 2023 tax decisions, certain new rules apply on the charge of VAT. For instance, the government has decided to maintained a reduced 13% VAT rate (as oppoosed to usual rate charged, of 24%) for certain medical supplies. The lower tax rate will be maintained until 31 December 2023.
Besides this, the goverment has also decided to continue the charge of the lower VAT rate of 13% for certain products which were usually charged with the standard VAT rate. This is the 4th extension imposed by the government for the sale of certain goods, and it was maintained in force due to the inflation rate announced for the financial year of 2023.
Meet us in Athens
Federico Richardson is our company formation expert in Greece and the founder of Lexidy Law Boutique SLP.
He can assist clients with the entire company registration procedure in Greece.
He can assist clients with the entire company registration procedure in Greece.
Call us now at +302111995654 to set up an appointment with our lawyers in Athens, Greece. Alternatively you can incorporate your company without traveling to Greece.
As a Lexidy Law Boutique SLP client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Greece.
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