Greece Crypto Tax

While crypto investments made by Greek residents have grown, so has the number of Greece-based cryptocurrency ATMs and other crypto-related products and services. In turn, Greek authorities don’t rush to introduce a comprehensive crypto-specific taxation framework. The focus is on providing efficient and fair taxation, which is in tune with the latest EU regulations that slowly come into force.

First, the main EU regulations to be looked at are the amendments that have been done to the EU’s Directive on Administrative Cooperation (DAC), which prescribes new rules for all crypto-asset service providers in the EU. These impose the obligation on crypto businesses to report transactions of clients residing in the EU and thus enhance the detection of tax evasion and fraud.

DAC also is in line with the Crypto-Asset Reporting Framework, or CARF, which the ​Organization for Economic Cooperation and Development introduced recently to automate crypto-tax reporting and information sharing among international tax authorities. It also discusses harmonization with the landmark Markets in Crypto-Assets, or MiCA, regulations that are aimed at bringing legal clarity-let’s include taxation-to the crypto business.

The purpose of the Independent Public Revenues Authority – IPRA is to apply the national, EU, and international regulations on taxation in Greece, as well as collecting and administering taxes within Greece. The financial year is the same as the calendar year and cannot differ from the taxation period, i.e. it cannot be longer than 12 months.

Greek Tax Incentives

In Greece, there are a number of tax incentives that an innovative business can enjoy. They include but are not limited to incentives for employers and strategic investors, deduction of the advertising cost, and so on. Most of them depend on their availability based on either residence status of business or the location at which the business activities are carried out.

Greece also has almost 60 international agreements on the elimination of double taxation, which is quite a large network. These agreements help avoid the possibility of having the same income being taxed in two countries, while they also provide clarity with respect to cross-border trade and investment for tax purposes. Such agreements may apply for an internationally present crypto company to optimize taxes imposed on interest, dividends, and other types of income.

Corporate Income Tax

The regular tax rate for Corporate Income Tax is 22%, and it is imposed on several classes of income. All tax-resident companies are taxed on their worldwide income, whereas non-resident ones are subjected to tax only on any Greek-sourced income. A Greek company is regarded as a tax resident if it was established under Greek legislation, if its statutory seat is in Greece, or if its effective place of management is in Greece.

Most Greek companies are obliged to file their tax returns electronically by the last day of the 6th month following the end of the tax year. Greek tax returns can be revised either by paying the difference in tax or by using one’s rights for a refund of the tax paid in excess in line with the revised tax return. Corrective tax assessment acts are also possible in certain circumstances.

Generally speaking, income derived from crypto-related activities is taxable; however, there is no guidance in depth explaining how different crypto products and services are taxed. For example, it is not fully clear how income from mining is treated for tax purposes, and in most instances, a deeper review of the particular business case needs to be considered before any taxation is imposed. On the contrary, it clearly follows that the moment cryptocurrencies derived from mining are traded for fiat currency, such earnings are subject to a 22% tax upon deduction of costs.

Value-Added Tax

In Greece, the regular VAT rate amounts to 24% and is applied with respect to supplies of goods and services that take place within the country and are not subject to a reduced VAT rate. By default, crypto activities are taxed at a regular rate. Consequently, crypto entities that intend to start economic activities in Greece are obliged to submit their registration form no later than the date of commencement of the first taxable activity and obtain a Greek VAT number through the local tax office.

It is important to underline that non-EU businesses that have no registered office or effective management within the EU are obliged to appoint a tax representative in Greece responsible for the tax liabilities of their represented company. As far as the VAT thresholds are concerned, the distance sellers to private individuals located in Greece are obliged to be registered for VAT purposes as soon as their annual revenue exceeds 35,000 EUR.

Some crypto activities can enjoy the exemption from VAT. Crypto mining, for instance, has been made free from the imposition of VAT because there is an absence or insufficiency of a relationship between the seller and customer that would constitute a taxable event. The exchange of cryptocurrencies for fiat money and vice versa, as well as the exchange of cryptocurrencies for other cryptocurrencies, are exempted from VAT by virtue of the decision of the Court of Justice of the European Union (CJEU) that excluded the possibility of such cryptocurrencies as Bitcoin being treated as fiat money for VAT purposes no matter their categorization by national authorities.

Capital Gains Tax

According to IPRA, individual income coming from crypto transactions is taxed at a 15% rate of the Capital Gains Tax. Capital gains are the fruits of subtracting the acquisition price paid by the taxpayer and costs associated with the acquisition from the received sale price. For companies, capital gains are taxed as business income at a 22% rate of the Corporate Income Tax.

Furthermore, the sale of both unlisted shares and listed shares is subjected to a Capital Gains Tax of 15%. The capital gains acquired from the selling of shares in a subsidiary company within the EU are exempt from tax when the selling party’s participation is above 10%, and the share has been held for a period of at least two years. In almost all cases, transfer duty of 2% is paid based on gross gains derived from the sale of listed shares.

Withholding Tax

Royalties and fees payable for consultancy and other advisory services and management fees received by tax-resident companies in Greece are, in principle, fully exempt from the Greek WHT. Non-resident companies not acting via a permanent establishment in Greece should not be required to pay tax on technical or consultancy services or other similar services and management fees.

Payroll Taxes

Any employer in Greece is obligated to deduct and pay progressive Personal Income Tax on behalf of the employees to the Greek tax house no later than the 20th of every month. Social Security Contributions are deducted and paid to the e-National Social Security Fund for retirement pension, sickness, industrial injury, unemployment, paternal leave, and national health insurance. Social Security Contributions are contributory in nature, with the rate being 22.29% for employers and 13.87% for employees.

How much tax do I need to pay for crypto in Greece in 2024?

One of the hot topics for Greek taxpayers in the coming year of 2024 will involve the taxation of income from cryptocurrency transactions. The Greek government is fully aware that the recent fast development of digital finance, including cryptocurrencies, urgently requires the corresponding adjustment of Greece’s tax system to be in compliance with modern realities. Understanding how to properly declare and pay taxes on cryptocurrency income will help avoid potential tax penalties and other legal consequences. The step-by-step guide on paying taxes with cryptocurrencies in Greece is presented below in detail.

Basic issues of taxation of cryptocurrency

The Greek tax system considers income deriving from cryptocurrencies as financial assets and therefore such income shall be declared and is taxable. More specifically, any income provided by the trading, mining, steaking, or generally by any type of transaction in cryptocurrencies should be declared and it is taxable.

How to declare income from cryptocurrencies

1. Determining income: You must determine how much you derived from cryptocurrencies during the year for taxation. This, of course, will involve your profits from the sale of cryptocurrencies, mining and steaking income, and any other forms of income.
2. Calculating your taxable income: Subtract the cost of purchasing cryptocurrency and related expenses, including but not limited to trading and exchange fees, from your total income.
3. Declaration of Income: You will have to declare your cryptocurrency income in your return that is filed annually. Greek tax authorities require all the taxpayers to declare detailed information regarding their financial transactions, including those involving cryptocurrencies as well.

Tax rates

For the year 2024, Greece’s tax rate on income from cryptocurrencies depends on the total income of a taxpayer. Consequently, cryptocurrency income is taxable at a rate that may vary between 15% and 45%, just like tax rates for capital gains. It should be considered that these rates might change, so any further and updated information may be reached from the official website of the Greek Tax Authority or by contacting a tax advisor.

Accounting and documentation

To declare and pay taxes more easily, all your transactions in cryptocurrency should be accurately recorded – dates of transactions, volume, purchase and sale prices, and all the costs associated with it. It will help you correctly calculate your taxable income and prove these calculations in case of a tax audit. Store all relevant documents and e-records for at least five years, which is a standard condition for tax documents in Greece.

Tips on paying taxes with cryptocurrencies

Seek professionals: Tax legislation is complicated and changes a lot. For such relatively new financial instruments as cryptocurrencies, it is recommended to at least contact a professional qualified tax advisor, specialized in cryptocurrencies, for the latest information and declaration advice.

Update your knowledge:

Regularly check for updates about Greek tax laws with respect to cryptocurrencies to be up-to-date on changes in laws that may impact your tax liability.

Reliable tracking tools: Avail yourself of cryptocurrency accounting software or apps to automate the process of gathering and analyzing your transaction data. This might make preparation for tax season a whole lot easier.

Paying income proceeds derived from cryptocurrencies in Greece is a very demanding task, requiring much planning and preparation. In any respect, local tax legislation is to be followed, with proper records of transactions being kept by any person who wants to avoid unpleasant surprises when having to pay their due taxes. Keep in mind that the legislation concerning cryptocurrencies is changing daily, and updated information received from professionals is an invaluable tool when trying to meet all the imposed demands. Therefore, consulting professionals who can provide updated information is crucial.

Overview of Greece’s Main Tax Rates for 2024

If one is committed to running a successful crypto business in Greece and is seeking ways to optimize one’s taxes, then highly qualified and experienced legal consultants at Regulated United Europe (RUE) will be glad to help him or her. We closely follow and clearly understand local and international taxation rules applicable to crypto businesses, striving to make sure that our clients, besides operating in compliance with local regulations, operate in a tax-efficient manner. Actually, we can help you with setting up a new Greek crypto company, including crypto licensing and financial accounting. Book a personalized consultation and get value from extensive legal support that will pave the way to success.

Third-country crypto lawyers from Regulated United Europe also provide crypto projects with legal support for adaptation to MICA regulations.