VAT, GST and Sales Tax in Greece

Summary

Name of the tax Value-added tax (VAT)
Local name Foros prostithemenis aksias (FPA)
Date introduced 1-Jan-87
Trading bloc membership European Union (EU) Member State
Administered by Ministry of Finance (http://www.minfin.gr/)
VAT rates
Standard 24%
Reduced 6%, 13%
Other Exempt and exempt with credit
VAT number format EL 1 2 3 4 5 6 7 8 9
VAT return periods
Monthly Double-entry accounting
Quarterly Single-entry accounting
Thresholds
Registration None
Distance selling EUR35,000
Recovery of VAT by non-established businesses Yes (for businesses established in Norway, Switzerland or the EU)

Scope of the tax

VAT applies to the following transactions:

  • The supply of goods or services made in Greece by a taxable person
  • Reverse-charge services received by a taxable person in Greece
  • The intra-Community acquisition of goods from another EU Member State by a taxable person
  • The importation of goods and certain services from outside the EU, regardless of the status of the importer

For VAT purposes, the territory of Greece excludes Mount Athos.

Who is liable

A taxable person is any entity or individual that makes taxable supplies of goods or services, intra-Community acquisitions, imports of goods into Greece or distance sales (if the relevant annual threshold is exceeded), in the course of a business in Greece.

Group registration. VAT grouping is not permitted under Greek VAT law. Legal entities that are closely connected should register for VAT individually.

Non-established businesses. A “non-established business” is a business that does not have an establishment in Greece. A foreign or non-established business should register for VAT in Greece if it engages in any of the following taxable activities:

  • Supply of goods that are located in Greece at the time of supply
  • Intra-Community acquisitions
  • Distance sales in excess of the annual threshold (EUR35,000)
  • Imports
  • Services to which the reverse charge does not apply

The reverse charge generally applies to supplies made by non-established businesses to taxable persons. Under this measure, the taxable person that receives the supply should account for the Greek VAT due. If the reverse charge applies, the non-established business is not required to register for Greek VAT.

The reverse charge does not apply to supplies of goods or services made to private persons.

Tax representatives. A foreign business, non-established and non-registered in Greece, should obtain a Greek VAT registration number before making taxable supplies in Greece.

In general, a non-EU business must appoint a tax representative, called locally a VAT fiscal representative, to register for VAT. (An exemption applies for registration under the non-Union scheme of MOSS.) The VAT fiscal representative should be given, among other documents required by law, a power of attorney to act on behalf of the non-established business.

The VAT fiscal representative should be appointed and registra­tion obtained before the non-established business begins to make taxable supplies. The VAT fiscal representative may be any per­son engaged by the business who is resident and VAT liable in Greece, such as a legal entity or an accountant. The VAT fiscal representative is jointly liable for VAT debts with the foreign business that it represents.

An EU business is not required to appoint a VAT fiscal represen­tative to register for VAT in Greece but may opt to do so. If a VAT fiscal representative is appointed at the foreign EU business’s option, such VAT representative undertakes compliance proce­dures and may be held jointly liable for VAT debts of the foreign EU business.

Registration procedures. Businesses established in the EU that are required to register locally in Greece can do so and obtain a Greek VAT registration number:

  • Directly by applying electronically in a simplified process aimed at EU businesses with no prior registration or establish­ment in Greece, in which case the appointment of a VAT fiscal representative is not required
  • By filing in hard copy an application form along with all required documents — including a memorandum of association and a certificate of taxable status, among others — and by appointing locally a VAT fiscal representative

Businesses established outside the EU that are required to regis­ter locally for VAT purposes in Greece are required to appoint a local VAT fiscal representative. No electronic registration is available.

In some cases the appropriate local tax office shall not grant the requested Greek VAT registration number to the applicant (for­eign business), for example, if the business had already obtained a Greek VAT registration number.

Special registration procedures apply under the Mini One-Stop Shop (MOSS) scheme (see below).

Late-registration penalties. A EUR100 penalty may be incurred for late VAT registration.

Reverse charge. In general, VAT due on cross-border business-to­business supplies of services shall be due at the place where the customer is situated. Where the reverse-charge procedure applies, the Greek recipient must act as both supplier and recipient of the services for VAT purposes. That is, the Greek customer should account for both output and input VAT on the VAT return.

For cross-border business-to-consumer supplies of services, the place of taxation continues to be the place where the supplier is established. However, in certain circumstances, the general rules for both businesses and consumers shall not be applicable, and specified rules shall continue to apply to reflect the principle of taxation at the place of consumption. These exemptions apply to many services including those related to real estate property located in Greece; restaurant services; the hiring of means of transport; cultural, sporting, scientific and educational services; and business-to-consumer supplies of telecommunications, broad­casting and electronic services.

VAT law provides a use-and-enjoyment rule for the following services to customers established outside the European Union:

  • Short-term lease of means of transport services provided on a business-to-consumer basis
  • Telecommunication services or electronically supplied services or radio or television broadcasting services provided on a business-to-consumer basis
  • Lease of movable goods provided on a business-to-consumer basis

In such cases, the place of taxation shifts back to Greece when the use and enjoyment of the services takes place in Greece.

Domestic reverse charge. Domestic reverse charge applies in case of supplies of scrap, recyclable goods and gas emission rights pursuant to Article 39a of the Greek VAT Code on certain condi­tions.

Moreover, a domestic reverse-charge mechanism has been intro­duced for construction works on real estate provided by private contractors to local municipalities or other public bodies, where the latter are acting as taxable persons for VAT purposes. In some of these cases, no Greek VAT is charged on the invoice issued by the private contractor (supplier) to the municipality or other public body, and the supplier is not required to account for VAT but is required to indicate on the invoice a special wording indicating application of this regime as follows: “Article 39A of the Greek VAT Code – domestic reverse charge.” The supplier has a full right to deduct input VAT incurred in relation to such supplies.

Digital economy. As of January 2015, the place of supply of tele­communication, broadcasting and electronically provided servic­es to nontaxable persons (B2C) is where the customer is established.

Mini One-Stop Shop (MOSS). The Mini One-Stop Shop scheme (MOSS) is officially in force in Greece as of 1 January 2015, allowing suppliers of telecommunication, broadcasting and elec­tronic services to consumers in Member States, where they have no establishment for VAT purposes, to pay the VAT due on such services via an online portal in the Member State where they are registered for tax purposes.

Such suppliers may elect to get registered in Greece on the basis of the MOSS scheme and on the basis of the relevant requirements and procedure, since both the Union scheme and the non-Union scheme have been enacted locally. A special registration form is used for MOSS registration purposes. Greece has implemented the provisions of Directive 2008/8/EE, according to which the place of supply of the telecommunication services or electroni­cally supplied services or radio or television broadcasting services to a nontaxable person shall be the place where that person is established, has his permanent address or usually resides.

Deregistration. A taxable person that ceases to be required to account for Greek VAT may opt to deregister. If such taxable per­son is not deregistered, he must continue complying with all rel­evant filing obligations.

VAT rates

The term “taxable supplies” refers to supplies of goods and ser­vices that are liable to a rate of VAT.

In Greece, the VAT rate depends on where the supply is made. The standard rate is 24% and the reduced rates are 13% and 6%. For a number of islands (belonging to the Prefectures of Evros, Lesvos, Chios, Samos and Dodecanese – with the exception of Rhodes and Karpathos) the standard rate is 16% and the reduced rates are 9% and 4%; these rates for the respective islands are expected to apply until 31 December 2017.

The standard rate of VAT applies to all supplies of goods or ser­vices, unless a specific measure allows a reduced rate or exemption.

Examples of goods and services taxable at 13%

  • Hotel accommodation services (as of 1 October 2015)

Examples of goods and services taxable at 6%

  • Books
  • Newspapers
  • Magazines
  • Theatre tickets

The term “exempt supplies” refers to supplies of goods and ser­vices that are not liable to tax and that do not give rise to a right of input tax deduction (see Section F).

Some supplies are classified as “exempt with credit,” which means that no VAT is chargeable, but the supplier may recover related input tax. Exempt-with-credit supplies include exports of goods outside the EU and related services, as well as intra­Community supplies of goods and intangible services supplied to a taxable person established in the EU or to any recipient outside the EU.

Examples of exempt supplies of goods and services

  • Postal services
  • Finance
  • Insurance
  • Sales and rental of immovable property
  • Medical services supplied by public law and other not-for­profit organizations
  • Health care

Option to tax for exempt supplies. Optionally, commercial lease of real estate may be subject to VAT instead of stamp duty, upon mutual agreement of the lessor and the lessee. The lessor must submit a specific request to the appropriate tax office before the commencement of the lease.

Time of supply

The time when VAT becomes due is called the “time of supply” or “tax point.”

Goods. The basic time of supply for goods is when the goods are put at the purchaser’s disposal. If the supplier undertakes the obligation to forward the goods to the buyer, the time of supply is at the beginning of the transportation. For installed goods, the time of supply is when installation is completed. If the supplier issues an invoice before the basic time of supply, the time of sup­ply becomes the invoice date.

Services. In general, the time of supply for services is when they are performed. If the supplier issues an invoice before the basic time of supply, the time of supply is the invoice date.

Prepayments. Payments received before the supply of goods or services or the issuance of a VAT invoice are known as advance payments. Advance payments do not generally create a tax point (they create a tax point only in the event of an intra-Community supply of services).

Intra-Community acquisitions of goods. For intra-Community acquisitions, the time of supply is when the goods are put at the purchaser’s disposal. If the supplier undertakes the obligation to forward the goods to the buyer, the time of supply is the begin­ning of the transportation. VAT is due on the issuance of an invoice, or by the 15th day of the month following the month in which the supply took place, whichever is the earlier.

Imported goods. The time of supply for an importation is when the importation occurs or when the goods leave a duty suspension regime.

Cash accounting. A “cash accounting system” has been intro­duced in Greece for local taxable (VAT-able) supplies of goods or services and is aimed at businesses with an annual turnover not exceeding the EUR2 million threshold.

Application of this regime is only optional and can be activated after filing an application to the tax authority before the begin­ning of the fiscal year concerned. For businesses registered under this new regime:

  • Output VAT shall become due upon collection of the consider­ation or part thereof
  • Input VAT incurred in relation to supplies of goods or services is deductible at the time when the taxable person (supplier) receives payment of consideration or a part thereof from the recipient of the goods or services.

The recipients of goods and services supplied by taxable persons, who have opted for this scheme, exercise their right to deduct the respective input VAT upon payment of the consideration to the taxable person (supplier). The tax records issued by entities applying this scheme should indicate the following: “Cash accounting scheme: Article 226.7a Directive 200/112/EC — Article 39B VAT Code.” Issuance of a special record for prepay­ments is provided for, in cases of prepayments’ collection in the context of special scheme’s transactions.

Continuous supplies of services. If services are provided continu­ously, the tax point is the time that any amount is considered as payable.

Intra-Community supplies of goods. For intra-Community acquisi­tions, the time of supply is when the goods are put at the pur­chaser’s disposal. If the seller undertakes the obligation to forward the goods to the buyer, the time of supply coincides with the beginning of the transportation. VAT is due upon the issuance of the respective invoice, and at the latest on the 15th day of the month following the one on which the supply was effected.

Recovery of VAT by taxable persons

A taxable person may recover input tax, which is VAT charged on goods and services supplied to it for business purposes. A taxable person generally recovers input tax deducting it from output tax, which is VAT charged on supplies made.

Input tax includes VAT charged on goods and services supplied within Greece, VAT paid on imports of goods and VAT self-assessed on the intra-Community acquisition of goods and reverse-charge services.

A valid tax invoice or customs document should generally accompany a claim for input tax.

Nondeductible input tax. Input tax may not be recovered on pur­chases of goods and services that are not used for business pur­poses (for example, goods acquired for private use). In addition, input tax may not be recovered for some items of business expen­diture.

The following lists provide some examples of items of expendi­ture for which input tax is not deductible and examples of items for which input tax is deductible if the expenditure is related to a taxable business use.

Examples of items for which input tax is nondeductible

  • Hotel accommodation
  • Business gifts valued at more than EUR10
  • Lease, purchase, hire and maintenance of cars
  • Fuel for cars
  • Business entertainment
  • Home telephone bills
  • Taxis
  • Public transport
  • Food, drink and tobacco

Examples of items for which input tax is deductible
(if related to a taxable business use)

  • Books
  • Attending conferences and seminars
  • Lease, purchase, hire and maintenance of vans and trucks
  • Fuel for vans and trucks
  • Mobile telephones
  • Utilities

Partial exemption. Input tax directly related to making exempt supplies is not generally recoverable. If a Greek taxable person makes both exempt and taxable supplies, it may not recover input tax in full. This situation is referred to as “partial exemption.” Exempt with credit supplies are treated as taxable supplies for these purposes.

The amount of input tax that may be recovered is calculated in the following two stages:

  • The first stage identifies the input VAT that may be directly allocated to taxable supplies and exempt supplies. Input tax directly allocated to taxable supplies is deductible, while input tax directly related to exempt supplies is not deductible.
  • The second stage identifies the amount of the remaining input tax (for example, on general business overhead) that may be allocated to taxable supplies and recovered. The calculation is based on the value of taxable supplies made compared with total turnover. The partial exemption recovery percentage is rounded up to the nearest whole number (for example, a recovery percentage of 75.1% is rounded up to 76%).

Capital goods. Capital goods are items of capital expenditure that are used in a business over several years. Input tax is generally deducted in the VAT year in which the goods are acquired. The amount of input tax recovered depends on the taxable person’s partial exemption recovery position in the VAT year of acquisi­tion. However, the amount of input tax recovered for capital goods should be adjusted over time if the taxable person’s partial exemp­tion recovery percentage changes during the adjustment period.

In Greece, the capital goods adjustment applies to the following assets for a period of five years:

  • Land and buildings
  • Other movable capital assets and certain intangible goods

In the tax period of first use, the input VAT is deducted according to whether and to what extent the goods are used for taxable activities. One fifth of the total input VAT is attributed to each year of the adjustment period. At the end of each year, an adjust­ment of the input VAT has to be made according to the use of the goods (exempt/taxable) in that particular year. When the use of the goods in an adjustment year has changed compared to the use of the goods in the tax period of first use, part of the input VAT must be paid to or can be recovered from the authorities.

The final input VAT adjustment is performed on the basis of the overall data of the fiscal year, derived from the respective VAT returns.

The obligation to remit VAT is abolished if the amount of output VAT due in capital goods’ supplies that occur during the adjust­ment monitoring period is lower than the VAT corresponding to the remaining years of this period.

Refunds. If the amount of input tax recoverable in a period exceeds the amount of output tax payable in that period, the tax­able person has an input tax credit. If a VAT return results in an input VAT credit, the amount may be carried forward to offset output VAT payable in subsequent periods. Alternatively, the VAT return may be accompanied by a request for a refund.

Theoretically, a tax audit is not a prerequisite for the refund. However, under certain circumstances, a taxable person may be selected for a tax audit prior to the refund, based on a risk analy­sis method performed by the Directorate of the Ministry of Finance.

Preregistration costs. Not applicable.

Write-off of bad debts. As a general rule, no adjustment can be made concerning bad debts. Any amount of VAT charged must be paid to the Greek State, even if it has not been collected by the taxable person from their customer. As an exception to this gen­eral rule, relief could theoretically be provided for the supplier upon the tax authority’s approval in case the customer has been subject to a special ‘winding-up’ or ‘liquidation’ process provid­ed by domestic Greek legislation and provided that a court order has been issued beforehand; however, this exception has rarely been applied in practice.

Noneconomic activities. Not applicable.

Recovery of VAT by non-established businesses

Greece refunds VAT incurred by EU businesses that are neither established in Greece nor registered for VAT there. Refund is made under the terms of the EU Directives 2006/112/EC and 2008/9/EC. Greece does not yet refund VAT under the terms of the EU 13th Directive (Directive 86/560/EEC) to businesses established outside the EU, with the exception of businesses established in Norway and Switzerland. A Norwegian, Swiss or EU business may claim Greek VAT refunds to the same extent as a Greek taxable person.

Refund application. Greece has incorporated into its VAT law the provisions of EU Directive 2008/9/EC, which provides detailed rules for the refund of value-added tax, provided for in EU Directive 2006/112/EC, to taxable persons not established in Greece but established in another EU Member State. These mea­sures took effect on 1 January 2010 and applied for the first time to refund claims of foreign businesses with respect to Greek VAT incurred in 2009. In accordance with EU Directive 2008/9/EC, VAT refund applications should be submitted electronically.

According to the guidelines issued by the Greek VAT authorities on the procedure for the 8th VAT Directive rules, the refund application should be submitted by 30 September of the calendar year following the refund period. Claims should be submitted electronically in either Greek or English and should be accompa­nied by scanned copies of relevant invoices placed in an elec­tronic archive or file. The refund period should be no longer than one calendar year (the minimum VAT claim amount is EUR50) or less than three calendar months (the minimum VAT claim amount is EUR400). The appropriate Greek authority for this purpose is the following:

The Hellenic Republic

Ministry of Finance, VAT Division

Directorate of VAT Administration and Resources

Sina 2-4

10672 Athens

Greece

Repayment interest. If the refund application is approved, refund of the approved amount should be paid within 10 working days after the expiration of the deadline to respond. Interest is payable to the applicant on the amount of the refund to be paid if the refund is paid after the last date for payment. Interest due is cal­culated according to the rules applicable for payment of default interest to Greek taxable persons.

Invoicing

VAT invoices and credit notes. A taxable person should generally provide a VAT invoice for all taxable supplies made, including exports and intra-Community supplies. For retail transactions, retail receipts should be issued. A document qualifies as a valid invoice if it complies with requirements set out in the Greek legislation (Greek GAAP law 4308/2014 and relevant adminis­trative guidelines).

A valid original VAT invoice is required to support a claim for input tax deduction or a refund under the EU 8th Directive refund scheme. Invoices should comply with requirements set out in Greek legislation (Greek GAAP law 4308/2014 and relevant administrative guidelines) to qualify as valid evidence to support input tax deductions.

A VAT credit note may be used to reduce the VAT charged and reclaimed on a supply. A credit note should be cross-referenced to the original VAT invoice.

Proof of exports and intra-Community supplies. VAT is not charge­able on supplies of exported goods or on intra-Community sup­plies of goods. However, to qualify as VAT-free, exports and intra-Community supplies should be supported by evidence confirming that the goods have left Greece. Acceptable proof includes the following documentation:

  • For an export, copies of the export document, officially vali­dated by customs and showing the supplier as the exporter, and the bill of lading issued by the transporter
  • For an intra-Community supply, a range of commercial docu­mentation, such as dispatch notes, the bill of lading and proof of payment

Foreign-currency invoices. If an invoice is received in a foreign currency, the amounts should be converted into euros. The exchange rate to be used is issued by the Ministry of Finance. An invoice may be issued in foreign currency if Greece is the place of supply of goods or services and if the amount of VAT payable is indicated in euros.

B2C invoices. Effective 1 January 2015, new rules apply to the place of supply for supplies of telecommunications, broadcasting and electronic services to non-VAT taxable customers. For fur­ther details of the VAT rules on electronic services in the EU, please refer to the European Union chapter.

VAT returns and payment

VAT returns. Greek periodic VAT returns are submitted:

  • Monthly if the taxable person maintains double entry account­ing books
  • Quarterly if the taxable person maintains single entry account­ing books.

For fiscal years ending after 1 January 2014, the requirement to file annual VAT returns has been abolished.

In principle, filing of VAT returns and full payment of the VAT due should be made by the last business day of the month follow­ing the end of the return period. However, in the case of VAT returns filed in time, taxpayers have the option of paying the VAT due in two equal installments provided that the total VAT amount payable exceeds EUR100. If they choose installments, the first installment is due by the last business day of the month during which the VAT return was submitted, and the second installment is due by the last business day of the following month.

No VAT return is required if a taxable person has suspended its business activity and has declared such suspension with the appropriate tax office.

As a general rule, it is mandatory to file VAT returns electroni­cally.

Special schemes. Taxable persons whose turnover exclusive of VAT during the previous fiscal year did not exceed the EUR10,000 threshold are exempted from the obligation to file VAT returns and from VAT payment, provided that they apply for and are registered as “small enterprises falling under the regime of Article 39 of Greek VAT Code.”

This exemption shall not apply to special scheme farmers, non-established taxable persons or supplies of new means of transport (Art. 28 par. 1b of the Greek VAT Code).

Application of this special regime requires filing of a relevant declaration to the tax office registry, which cannot be revoked during the following two years.

Tax records issued by these enterprises are issued with no VAT and must display prominently: “Without VAT: special scheme for small enterprises.” Taxable persons under this special scheme have no right to deduct input VAT.

If the turnover of the above taxable persons exceeds the EUR10,000 threshold after they have been registered as above as small enterprises, then they would mandatorily fall back to the standard VAT regime with effect as of the following fiscal year.

Penalties

Penalties are charged for late or inaccurate VAT returns, for the failure to file VAT returns and for the failure to account for VAT properly, as follows:

Procedural violation penalties in the EUR100–EUR500 range may be imposed for late or inaccurate VAT return or for failure to file a VAT return.

In the case of failure to issue an invoice or in the case of issuance or acceptance of inaccurate invoices for a transaction that should have been burdened with VAT, a penalty equal to 50% of the unpaid VAT amount or of the relevant difference (i.e., additional input VAT amount deducted) is imposed.

In the case of filing of an inaccurate VAT return or failing to file a VAT return, which results in a full or partial failure to account for VAT or results in the deduction or refund of additional input VAT, a penalty equal to 50% of the unpaid VAT amount or of the relevant difference (i.e., additional input VAT amount deducted or refunded) is imposed.

In the case of a business operation commenced without the appropriate registration with the tax authority, a penalty equal to 50% of the VAT amount that should have been paid to the tax authority during the operation of the business is imposed.

Finally, in cases of late payment, inaccurate underpayment or non-payment of VAT, the taxpayer is obliged to pay interest in arrears calculated on this amount on a monthly basis for the time period from the end of the payment deadline until the date of the payment. The current monthly rate at the time of publication is 0.73%.

EU filings

Intrastat. A Greek taxable person that trades with other EU coun­tries should complete statistical reports, known as Intrastat, if the value of its intra-Community sales or purchases exceeds certain thresholds. Separate reports are used for intra-Community acqui­sitions (Intrastat Arrivals) and intra-Community supplies (Intrastat Dispatches).

For 2016, the threshold for Intrastat Arrivals was EUR150,000. For 2016, the threshold for Intrastat Dispatches was EUR90,000.

The new Intrastat Arrivals and Intrastat Dispatches thresholds for 2017 are expected in late January 2017.

The Intrastat return is filed electronically on a monthly basis. The submission deadline is the last business day of the month follow­ing the end of the Intrastat return period.

A penalty amounting to EUR100 may be incurred for inaccurate or late or missing Intrastat returns.

EC Listings. EC Listings for cross-border supplies of both goods and services within the EU performed on or after 1 January 2010 are filed on a monthly basis. Separate forms should be filed for intra-Community dispatches (sales or supplies of services or goods) and for intra-Community acquisitions or receipt of ser­vices. In principle, EC Listings should be filed electronically through TAXISnet (that is, the electronic application of the Greek Ministry of Finance) by the 26th day of the month following the reporting period. It is not necessary to file nil EC Listings for a month in which no intra-Community transactions take place. EC Listings should include business-to-business (13213) services sup­plied on a cross-border basis only if these services are taxable in the country of the recipient. On the contrary, EC Listings should not include services that are exempt from VAT in the country of the recipient business. Taxable persons required to file EC Listings should verify through the VAT Information Exchange System (VIES) the VAT identification number of their customers before engaging in intra-Community transactions.

A penalty amounting to EUR100 may be incurred for inaccurate or late or missing EC Listings.