Dreaming of Santorini sunsets but stumped by Greek tax intricacies? Worry not! We’ve got you covered!
Whether it’s a tax overpayment or navigating deductions, understanding your Greek tax refund can add that extra bit of sunshine. You’re not alone, we’ll demystify it together.
Let’s dive in!
What’s It Like Living In Greece?
Greece offers so much that you can find your secret “paradise spot” away from the crowds.
Even in the summer, when the islands, beaches, and ancient ruins are teeming with excited visitors, you can always find a beach on one island or another away from all the hustle.
Cost Of Living
Greece is not only known for tourist attractions and incredible weather; it also has a reputation as being very affordable. When moving to Greece, or anywhere, there are a few points that everyone has on their checklist, such as:
Rent and Utilities
The cost of living in Greece is relatively low. According to Numbeo, in Athens, the most expensive city, you can find a one-bedroom apartment in the city center for 300-500€ and outside the center for 200-400€ per month.
If you’re looking for something more extensive, you can find a three-bedroom apartment for 500-1000€ in the city and 400-800 € per month outside the city center.
When it comes to utilities, you should expect to pay about 150-300€ depending on the size of your house, the season, and your level of usage.
Food and Groceries
Of course, the price of food is on everyone’s checklist when thinking about moving somewhere new.
You should expect to pay €10-18 in an inexpensive restaurant. For a meal for two people at a mid-range restaurant, expect to pay between €35 and €60.
Furthermore, Greece is famous for its agricultural products, such as olive oil, wine, cheese, and saffron. Recent studies show that Greece’s Mediterranean diet increases longevity and reduces heart disease and diabetes risk.
Greece boasts many modes of transport between cities and inside the towns. Athens has a very well-known tram system that connects various neighborhoods. For a one-way ticket for local transport in Greece, you should expect to pay about €1.40 and €30 for a monthly pass.
The Job Market
It is no secret that Greece suffered a painful economic setback during the global financial crisis back in 2008. Unemployment rates were high, and real estate prices dropped unprecedentedly.
Surprisingly, though, the Greek economy has started to take shape in the past couple of years, thanks to the relentless Greek workforce and various government initiatives to encourage investors, such as the Greece Golden Visa.
The job market for expats living in Greece is tricky since large international companies are limited. That said, the Greek government encourages expats to work there, especially in multinational companies or the travel industry.
Many expats in Greece work as English teachers, as it is a very sought-after profession there, especially in suburban areas and some of the Islands.
As a professional English teacher, you should expect a salary between €1200-€1800, which is comparatively low, but so is the cost of living there.
The minimum wage in Greece is fixed at €758.33 per month, which is not that high. However, most citizens in Greece who only make minimum wage tend to live with family or have inherited homes. That makes it easier to get by with such a modest income.
The average salary in Greece is between €1,428 and €2,788, depending on the professional’s work and experience.
Taxes in Greece
Non-residents in Greece get many tax benefits, which is yet another appealing quality about Greece. If you’re a non-resident in Greece, you only have to pay taxes on your income there.
In other words, you are exempt from taxes on any income from outside of Greece.
Furthermore, Greece has Double Taxation Treaties with various countries to prevent double taxation. Check out the FAQ section for a list of countries that have a double taxation treaty with Greece.
Taxpayer Identification Number
After moving to Greece and finding a job there, you should apply for a taxpayer identification number known as (AFM), as you need this number to open a bank account and set up your utilities.
You must visit your local tax office to apply for your identification number. Usually, filling out the M1 Form and bringing your passport with you should be enough, but always consult your local tax office to see if additional documents are required.
You must pay taxes in Greece if you meet at least one of the following conditions:
- Having a permanent residence in Greece
- Having spent more than 183 days during any calendar year in Greece
- Being employed or carrying out a professional activity in Greece
- Having an investment or business in Greece
- Receiving an annual income of more than €3,000 (from self-employment, salaries, pensions, alimony, or agricultural activities.)
Types of taxes in Greece
In Greece, there are four different types of taxes, which are:
- Income Tax
- Social Security Tax
- Capital Gains Tax (taxes on lottery gains, inheritance, and real estate property transfer)
- VAT (Value Added Tax) on the prices of services and products in the country.
The rates on various income and capital gains taxes vary dramatically. It can vary from 9% on employment income up to €10,000 to 44% on income over €40,000.
What Is A Tax Refund?
The term “tax refund” refers to a reimbursement made to a taxpayer for any excess amount paid in taxes to the federal or state government.
While taxpayers consider a refund a bonus or a stroke of luck, it often represents an interest-free loan that the taxpayer made to the government.
It’s often possible to avoid overpaying your taxes so you can keep more money in your pocket each paycheck—and avoid a refund when you file your tax return.
How Are Tax-Free Refunds Calculated In Greece?
It can be challenging to figure out how much you will be reimbursed in Greece and other countries that offer tax-free shopping.
First of all, to find out how much your tax-free refund will be, there are 2 things you need to know:
- The VAT rate in Greece
- The VAT status of the product you purchased
We will use an example to try to explain how much your tax-free refund will be. Greece applies a 24% VAT rate to its products. In other words, of a 1200 EUR purchase, 232 EUR goes towards tax.
Therefore, you should get 232/1200 or 19.3% of your tax-free purchase back; however, it is impossible to recover this entire amount fully.
Another thing you need to know when calculating your tax-free refund in Greece is that you need to work with an intermediary refund agent in order to get your tax-free payment.
Although throughout Europe, Planet Payment and Global Blue are the 2 most popular companies in this regard, other companies may mediate local or smaller tax-free transactions and can vary by country.
The commission these intermediary companies receive may also affect the amount you can get back.
These companies usually deduct a percentage from the total refund you will receive. The higher the prices of the products you buy, the lower the deduction percentage will be.
Since the commission received by tax-free refund agents can vary from company to company, this page will help guide you on how to calculate tax-free refunds in Greece.
The total amount you receive back will depend on the company, whether you want your refund in cash, and whether the payout credited to your account will be subject to currency conversions.
What Is VAT?
VAT, or Value Added Tax, is a consumption tax levied on the added value of goods and services. Unlike a revenue tax, it’s the private consumers who pay it.
Most countries, especially within the European Union, apply this tax, though it goes by various names like TVA, IVA, and MwST, among others.
VAT vs. Sales Tax – Know the Difference
In countries like the U.S., consumers are familiar with sales tax. However, European countries, including member states like France and Germany, have a VAT (Value Added Tax) system.
The difference? While sales tax is a direct levy on the retail sale of goods, VAT is applied at every production stage.
How Does VAT Differ Across European Countries?
Each EU member state, from Belgium to Portugal, sets its standard VAT rate. For instance, Denmark has a rate of 25%, while Germany’s rate is 19%.
The tax rate in each country will determine the total amount of VAT you pay on your purchases. Outside the European Union, Switzerland has a standard rate of 7.7%. It’s essential to know these rates before you start shopping.
The Basics Of VAT Refunds
Why can you get a VAT Tax Refund?
This system offers tax-free shopping for non-EU residents, meaning the VAT paid can be claimed back.
When you shop in Spain, the price tag includes VAT, but you’re eligible for a refund on this tax as a visitor. This is because, from a tax authorities’ perspective, purchased goods by tourists are akin to “exports”.
Am I Eligible for a VAT Refund? Who can Claim the VAT Refund?
The primary criteria: you should reside outside the European Union. But there’s more to the eligibility checklist.
You qualify if you’re not a permanent resident in Europe and buying goods (not services) during your visit. Think of your purchases as “exports”. Since exports are exempt from VAT, you can claim a refund.
However, expenses like hotel stays or dining aren’t eligible for refunds. They’re considered services consumed locally. There’s a caveat for business travelers, but the process can be arduous.
Also, there’s a spending threshold for claims, typically around EUR 175, but this varies across countries.
How To Get A Tax-free Refund In Greece
The 4 steps necessary in Greece to get tax back on your shopping:
- Choose stores that offer tax-free shopping.
- Have the necessary tax-free forms filled out at the store.
- Get your tax-free form verified by customs at the airport.
- Visit the airport offices of the tax refund company you work with.
Once you have completed these 4 steps, you will be able to receive your tax-free refund from Greece. Thus, you will get the products you bought in Greece for even less. Let’s take a look at each of these steps more closely.
Choosing a Tax-free Shop
Generally, when you shop for large, global brands, these brands will have tax-free agreements, and the paperwork should be no problem.
In this regard, we suggest asking whether it is possible to get a VAT refund when you enter the store. You can make the process easier by choosing stores with the words “Tax-free” on their showcases.
Completing the Required Tax-free Form at the Store
At this stage, all you have to do is mention that you are a visitor from abroad and would like to benefit from tax-free shopping. The store clerk will prepare the necessary documents to be filled out. All you will have to do is sign the documents.
Get Your Form Verified by Customs at the Airport in Greece
You must have your tax-free form approved by customs before you leave the country. The customs officer may want to check the products you purchased.
According to tax-free regulations, all products bought in Greece must remain unused until they leave the country. It may take some time to process your tax-free refund at the airport.
Therefore, we recommend that you be at the airport a minimum of 1 hour in advance of your usual arrival time.
Visit the Airport Offices of the Tax Refund Company You Work With
After your tax-free form has been approved, you need to go to the office of the tax refund company you are working with to receive your tax-free refund.
If you are departing from a large airport, you can locate their offices via either the company’s or the airport’s website.
Here, you will need to fill out a form stating how you want to receive your tax-free refund payment. You can get it refunded to your credit card once you return to your country or ask to receive cash at the airport by paying an extra commission.
Cash tax-free refunds are not available at all airports. However, if using a heavily trafficked airport in Greece, you should be able to receive payment in cash.
Other Things To Know About Tax-free Refunds In Greece
Tax-free refunds are available to people traveling to Greece for tourist purposes. In other words, you need a residence permit for your visiting country to get a refund
It would help if you reached a minimum purchase threshold to get a tax-free refund. You cannot get tax-free reimbursement for expenses below this limit. The minimum purchase threshold is calculated per invoice.
That is to say, if you make multiple separate purchases below the minimum threshold, even if the total exceeds the minimum threshold, you will not be able to get tax-free compensation.
Refunds for tax-free purchases in Greece are only valid for VAT. You can also deduct the VAT fees applied to the commission charged by your tax refund company.
The 7 Best Shopping Locations In Greece
Athens Metro Mall
Athens Metro Mall is located in the Agios Dimitrios area. It attracts around 60,000 customers daily, with many stores, eateries, and movie theaters.
Here, you can find a bunch of famous stores like Adidas, Bershka, Calzedonia, H&M, Intersport, and Oyosho. Stop by KFC, La Pasteria, and Palmie Bistro if you get hungry. Are you in the mood for some evening retail therapy? This is the right place for you!
The cobblestone street is 1.5 kilometers long and stretches from Syntagma Square to Pireos Street in the Kerameikos neighborhood.
This is the best location for brand shopping because it’s loaded with international stores like Pull & Bear, Bershka, and Zara! There are also local clothing boutique shops and stores with incredible beauty products.
Central Market Athens
Central Market, bursting with exotic flavors and aromas, is every food lover’s dream. It’s nestled in the famous Athinas Street and is often referred to as Varvakios.
During your walk around this area, you will come across a wide variety of meats, fruits, cheeses, and other food items. Take local products like fresh herbs, honey, and irresistible Greek olives.
There’s no doubt this area is heaven for chefs and food lovers.
Aeolu And Agios Markos Streets
Aeolus and Agios Markos are two famous streets in Athens with local shops selling yarn, shoes, and clothes.
This area is the go-to place for cheap shopping in the Greek capital. You’ll be amazed to see silk clothing items, proving that high quality is only sometimes associated with well-known names.
With that said, you can find some incredible hidden gems here – you need to stay patient and explore. When you’re done, head to one of the cozy nearby bars to enjoy a few drinks.
Plaka is one of the oldest locations in Greece and sits in the shadows of the Acropolis. It’s famous for having charming cafes, great restaurants, and unique jewelry stores.
The most popular spot here is the Byzantine jewelry shop, which features pieces made by local artists. Besides that, you have the opportunity to explore second-hand bookshops and traditional food shops. One thing’s for sure – Plaka has the best stores for gift shopping.
Seasoned shoppers love to go to Kifissia, the most luxurious district in the country. It’s packed with luxury brands like Armani and Bottega Veneta and overlooks a gorgeous green park.
For the ultimate shopping experience in Athens, treat yourself to dinner at a renowned high-end restaurant or an artisanal cafe after you’ve finished all your shopping.
Fish & Olive – Art Of The Aegean, Naxos
Halki in Naxos is home to a famous ceramic store, Fish & Olive Art of the Aegean. Potter Katharina Bolesch and her husband have established their ceramic studio in this unique location.
Her ceramic creations have received widespread recognition after she completed a three-year ceramics study program in Germany.
The Hellenic Folklore Research Center has an example of her work on display. Katharina’s stunning artwork primarily features olives, bees, and lizards.
As our odyssey through the labyrinth of Greek tax refunds concludes, remember: equipped with the right knowledge, even the trickiest of financial matters can be navigated smoothly.
Opa to a stress-free tax season in Greece!
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