Income Categories and Taxation in Greece

In Greece, the Income Tax Code (ITC) defines several categories of income, each of which is subject to specific tax treatment and rates. The main types of income subject to taxation include employment and pension income, business profits, capital income, and capital gains from the transfer of assets.

Employment and pension income constitute the most common sources of taxable earnings. These amounts are taxed progressively, with the rate increasing according to the taxpayer’s annual income. Specifically, income up to €10,000 is taxed at 9%, income between €10,001 and €20,000 at 22%, from €20,001 to €30,000 at 28%, from €30,001 to €40,000 at 36%, and any amount above €40,000 at 44%.

There is a special exemption for individuals with a disability rate of at least 80%, whose salaries, pensions, and fixed allowances are entirely tax-free. In addition, Article 14 of the ITC provides further exemptions for certain categories of income from wages and pensions.

The tax resulting from employment or pension income is reduced by €777 for taxpayers without dependent children. For those with dependents, the deduction increases according to the number of children, while it gradually decreases for all taxpayers with income exceeding €12,000, as provided by Article 16 of the ITC.

Profits generated from business activity are added to any income from salaries and pensions and taxed according to the same progressive scale. Thus, the self-employed or business owners are subject to the same rates as employees and pensioners, provided that their total taxable income is calculated jointly.

Another key category is capital income, which includes revenues from dividends, interest, royalties, and real estate. The tax rate varies depending on the source: dividends are taxed at 5%, interest at 15%, and royalties at 20%. Income derived from real estate is taxed separately under a progressive scale: 15% for annual income up to €12,000, 35% for the portion between €12,001 and €35,000, and 45% for income exceeding that threshold.

A further taxable category concerns capital gains from the transfer of capital assets, such as shares, company participations, bonds, derivatives, or other financial instruments. These are subject to a flat 15% tax rate. However, taxation on capital gains arising from the sale of real estate has been suspended until December 31, 2026, in accordance with Article 72 of the ITC.

Beyond taxation based on actual earnings, the law also provides for an alternative minimum tax, applied when the taxpayer’s imputed (presumptive) income is higher than the declared one. This imputed income is calculated based on objective living expenses—such as housing, vehicles, and other assets—as well as on the acquisition costs of property belonging to the taxpayer or their dependents. If the imputed income exceeds the declared income, it becomes the basis for taxation, as defined in Articles 30–34 of the ITC.

For self-employed individuals and those running sole proprietorships, a specific rule applies. Their minimum annual income from professional activity cannot be deemed lower than the amount determined under Articles 28A to 28D of the ITC. This ensures that taxation is based on a minimum reference income, even in cases where the declared profits are comparatively low.