What Is VAT in Greece? Rates and Exemptions Explained

Value Added Tax (VAT) is a consumption tax applied to most goods and services at each stage of the supply chain. In Greece, this tax is a significant component of government revenue, impacting nearly every transaction. It functions as an indirect tax, collected by businesses but ultimately borne by the final consumer.

Understanding Value Added Tax in Greece

VAT operates as a multi-stage tax, levied incrementally at each step of the production and distribution process, from raw materials to retail sale. Businesses involved in this chain act as intermediaries, collecting VAT on their sales. They remit to the tax authorities the difference between the VAT they charge on their sales (output VAT) and the VAT they pay on their purchases (input VAT). This system ensures the tax burden is passed along until it reaches the final consumer, who pays the full VAT amount.

Greek VAT Rates and Exemptions

Greece applies a standard VAT rate of 24% to most goods and services. The country also utilizes two reduced VAT rates to make certain essential goods and services more affordable.

A reduced rate of 13% applies to categories including hotel accommodations, restaurant and cafeteria services, certain foodstuffs, passenger transport, non-alcoholic beverages, and agricultural products. A super-reduced rate of 6% is in effect for items such as pharmaceutical products, books, newspapers, periodicals, natural gas, certain medical equipment for persons with disabilities, and tickets for theater performances and concerts.

Certain services are exempt from VAT in Greece. These exemptions include health and social care services, educational services, financial and insurance transactions, real estate transactions, and certain postal services.

Application of VAT for Businesses and Consumers

Businesses in Greece are responsible for adding VAT to the price of goods and services they sell. The collected VAT is then periodically remitted to the Independent Authority for Public Revenue (AADE), Greece’s tax administration body. Businesses can recover the VAT they pay on purchases related to their taxable activities, referred to as input VAT. This recovery mechanism prevents the tax from cascading through the business supply chain.

For consumers, VAT is included in the final retail price of products and services. Non-European Union tourists visiting Greece may be eligible for a VAT refund on certain purchases. To qualify, visitors must reside outside the EU and make purchases above a minimum threshold, which is €50 per receipt.

The refund process involves requesting a tax-free form from participating retailers, presenting the purchased goods and the form for customs stamping at the point of departure from the EU, and then submitting the stamped form to a designated refund agent. The goods must be exported from the EU within three months from the end of the month of purchase. This scheme allows eligible tourists to reclaim a portion of the VAT paid on items they take home.