Introduction to the Greek / Israel Economic Relationship

Given the significant improvement in relations over the past thirty years, it is not surprising that the economic relationship between Israel and Greece has been growing consistently over the past few decades. On the 24th of October 1995, the relationship was given a significant economic boost by the signing of a double tax treaty between the two countries.

The treaty (DTT) has helped promote transactions, foreign direct investment, the transfer of know-how and the exchange of goods and services between the two countries. The DTT provides mechanisms for the avoidance of double taxation for residents in both countries, has established a consistent tax framework and includes provisions addressing discrimination within the taxation process.

For investors based in Israel who are investing in Greece, the DTT provides certainty on how dividends, capital gains and other forms of income are taxed and where the tax is payable. As more and more Israeli individuals and companies have invested in Greece over recent years, the double tax treaty between Israel and Greece has become a critical instrument providing certainty to Israeli investors in Greece.

Tax coverage of the Greek Israeli Double Tax Treaty

The DTT covers both Greek individuals and companies that are actively doing business in Israel, as well as Israeli companies and individuals who are actively conducting business in Greece. This includes, among other activities, conducting trading businesses, purchasing real estate and making capital gains, purchasing and selling corporations and businesses and investing in real estate developments. The treaty sets out criteria for the determination of tax liabilities, including which country has taxing rights.

The taxation of real estate capital gains and income in Greece for Israeli investors and residents

The treaty stipulates that income from real estate located in Greece may be taxed in Greece, with specific provisions governing capital gains. In addition, Greek legislation provides for a 15% tax on certain real estate capital gains, although its application to qualifying individual property transfers is currently suspended until 31 December 2026. This means that qualifying profits from such transactions may not be subject to Greek capital gains tax during the suspension period. However, different rules apply to business activities and companies. For example, three property transactions within two years may be treated as business activity, depending on the applicable rules and circumstances.

With respect to income from rentals, which is classified as income, the tax rates are higher for individuals. A progressive scale of income tax applies. Where there is a company involved, the tax on income generally works off the corporate tax rate of 22%, subject to applicable rules. Therefore, you need to give much thought and take advice from an independent accountant (or seek assistance from our consultancy team in finding one) about the optimal purchase structure for any property investment.

How our partner accountants and tax experts can help you adopt the best company structure

There are a variety of key points to consider when choosing the optimal method for purchasing property in Greece. For example, the standard dividend tax rate in Greece is 5%, which is very low. The amount of any additional tax payable in Israel depends on the applicable treaty provisions, foreign tax credits and the investor’s individual circumstances. This assumes you are not considered a Greek resident for tax purposes.

It is also important to note that capital gains tax treatment differs depending on whether an investor is an individual or company, the nature of the asset and the applicable legislation. There is therefore further opportunity, if you explore the Double Tax Treaty with an independent tax professional, for efficient tax planning.

How we can help Israeli individuals and companies invest in Greece in a tax efficient manner

Whether you are purchasing properties or investing in Athens, Thessaloniki, Crete, Rhodes or other parts of Greece, investors and individuals from Israel have the comfort of knowing there is a Double Tax Treaty in place. If you maintain your Israeli tax residency, the treaty can help prevent double taxation, subject to the applicable rules and your individual circumstances.

For small property purchases, the costs and administrative processes of operating a company often do not result in the formation of a company being the most efficient method. Speak with our team today to discuss your options. We work closely with our independent partner accountants and lawyers to coordinate appropriate solutions.

In addition, we have experience in helping organisations from across the globe establish a company in Greece as well as identify opportunities for government contracts and business opportunities in the private sector in Greece and across Europe. We also have experience providing consultancy and coordination services for the Golden Visa Program as well as other visa programs for residency purposes, working with independent qualified professionals where required.

Speak to our team today to find out which of our independent accounting partners is best placed to help you.

Client testimonials

We have a number of major projects and whilst we were happy with our existing accountants, we wanted to double-check advice and make sure everything was structured correctly. We engaged Tsaks Consulting and had some initial discussions around the double tax treaty between Greece and Israel. We engaged one of Tsaks Consulting’s partner accountants to provide us with advice on a specific question and structure. They were excellent. We have since used Tsaks Consulting and one of their partner lawyers to assist with some regulatory advice and an important approval process. They always act with integrity. The team at Tsaks Consulting is the team we trust in Greece.

Isaac C | Property Investor | Israel and Greece

My first encounter with Tsaks Consulting was over email. Everything flowed well, and the team is very responsive and on the ball. We then arranged for our lawyer in Tel Aviv to speak with them, and he was also impressed. We then requested advice on our current structure. Our team spoke with one of their accounting partners, and then briefed them on a project we needed assistance with, which also required advice on the Double Tax Treaty.

Adam P | Private Company | Tel Aviv, Athens and Milos

Important Clarification

Tsaks Consulting Greece is a business consultancy, not a law firm or accounting practice. We provide business consultancy, administrative assistance and coordination services, working with independent accountants, lawyers and other qualified professionals who provide specialist tax, accounting and legal advice.

The information provided is general in nature and does not constitute personalised tax, financial or legal advice. Tax legislation, treaty provisions and individual circumstances should be reviewed with appropriately qualified independent professionals.