VAT in Greece: Rules and rates

The Value Added Tax (VAT) is one of the key components of the tax system in Greece. While VAT applies across all EU countries, Greece stands out with one of the highest VAT rates in Europe. The standard VAT rate is 24%, making it the highest in Europe after Hungary (27%), Finland (25.5%), and Croatia and Denmark (25%). Despite the high standard rate, Greece also applies reduced VAT rates on selected goods and services, which helps lower the costs of certain products.

VAT rates in Greece

In addition to the standard rate of 24%, Greece has two reduced VAT rates: 13% and 6%.

1. 13% rate: This applies to selected food items and non-alcoholic beverages, certain agricultural and pharmaceutical products, and medical equipment for people with disabilities. The reduced rate also applies to restaurant and catering services, as well as services related to care for disabled individuals and boarding schools.
2. 6% rate: This applies to more specific products and services, such as selected pharmaceutical products, books (excluding e-books), magazines, theater and concert tickets, as well as the supply of electricity, natural gas, and district heating.
3. 0% rate: A zero VAT rate is applied to international transportation, both maritime and air.

VAT registration in Greece

As in other EU countries, VAT registration in Greece is mandatory in several cases. Companies must register for VAT if they engage in intra-EU trade, import goods into Greece, or provide services within the country. Registration is also required for storing goods in Greece.

Additionally, if a company’s sales to other EU countries exceed €10,000, it must either account for VAT in the destination country or register in the VAT OSS system, which allows for VAT reporting on all EU transactions in a single country.

VAT registration in Greece is processed through the Independent Authority for Public Revenue (AADE). It requires submitting the appropriate documents, such as the registration form, the company’s articles of association, and an extract from the commercial register. Some of these documents may need to be translated into Greek.

VAT settlement in Greece

Businesses operating in Greece are required to regularly file VAT returns. These can be submitted either monthly or quarterly. Monthly returns must be filed by the 26th of the month following the reporting period, while quarterly returns have a 30-day deadline.

Since 2014, Greece has abolished the requirement for annual VAT returns, simplifying the administrative process for many businesses.

Intrastat in Greece

Companies involved in international trade that conduct intra-EU transactions may also be required to file Intrastat reports. These reports include data on the movement of goods between EU countries. In Greece, the threshold for reporting imports is €150,000, while for exports, it is €90,000. Reports must be submitted monthly, by the last day of the month following the reporting period.

VAT payments and penalties

One of the key VAT obligations in Greece is the timely payment of the declared VAT amount. VAT must be paid in full, as even a difference of a single cent may result in the rejection of the payment by the Greek tax authority. Therefore, accurate VAT reporting is crucial.

In the event of late VAT payments, interest of 0.73% per month is charged for each day of delay. If a company fails to register for VAT on time, it may be fined between €102.4 for voluntary late registration and up to €2,500 for failure to register. If the tax authority detects a missing VAT number, the company may be required to pay a penalty of 50% of the VAT due.

Penalties also apply for late filing of VAT returns. If a return is not submitted on time, the company may be fined €250. If the return does not include VAT to be paid, the penalty is reduced to €102.4.

Reverse charge mechanism

The Greek tax system also applies the reverse charge mechanism, which shifts the VAT liability to the buyer of goods or services. This mechanism is used to simplify VAT reporting and reduce the risk of tax fraud. In Greece, the reverse charge applies to sectors such as construction, where the buyer of construction services accounts for VAT. Similar rules apply to the supply of scrap metal and waste materials.

Summary

VAT in Greece, with its high standard rate of 24%, is among the highest in Europe. However, the tax system offers various reduced rates that apply to selected goods and services. Companies operating in Greece must ensure they register for VAT, file returns regularly, and make timely payments to avoid penalties and interest charges.