In brief
A Greek company pays corporate tax of 22% on its profit, and the standard VAT rate in Greece is 24%. When the company distributes a dividend to an Israeli shareholder, Greece withholds 5% under domestic law, and the tax treaty between Israel and Greece does not limit this rate, whereas on interest and royalties the treaty limits withholding to 10%. In Israel the dividend is taxed for an individual at 25%, or 30% for a substantial shareholder, with a credit for the tax withheld in Greece. Before deciding between salary and dividends, and before an Israeli company starts operating in Greece, the company's residence and permanent establishment should also be checked.
Key takeaways
- 1Greek corporate tax: 22% (credit institutions under a special regime 29%; shipping under tonnage tax). As of PwC's September 2026 summary.
- 2Withholding tax on dividends to a foreign shareholder: 5%. The treaty with Israel does not reduce it.
- 3Interest: 15% under Greek law, 10% under the treaty. Royalties: 20% under Greek law, 10% under the treaty.
- 4In Israel: a dividend to an individual is taxed at 25%, or 30% for a substantial shareholder (10% or more), with a credit for the 5% withheld in Greece.
- 5VAT in Greece: 24% standard rate, 13% and 6% reduced rates, and a 30% reduction on some Aegean islands.
- 6A building site in Greece is a permanent establishment under Greek law after three months, compared with 12 months under the OECD Model.
When an Israeli company or entrepreneur operates in Greece through a local company, tax is paid on two levels: in Greece, at company level and through withholding on distribution, and in Israel, when the profit reaches the shareholder. This guide explains the rates in Greece as of November 2026, what the treaty between Israel and Greece changes, and how to calculate the total burden. It does not replace the advice of an Israeli and a Greek accountant, because the outcome depends on the structure and the figures.
What is the corporate tax rate in Greece in 2026?
The corporate tax rate in Greece in 2026 is 22% on the taxable profit of legal entities, according to PwC's tax summary (as of November 2026), and it has applied since 1 January 2021. According to the same summary, reviewed in September 2026, credit institutions that elected the deferred tax asset regime pay 29%, and shipping profits are taxed under the tonnage tax regime and are exempt from corporate tax and from dividend withholding. A Greek company is taxed on its worldwide income, and a foreign company is taxed in Greece only on Greek-source income attributable to a permanent establishment there.
| Type of tax | Rate in Greece | Note |
|---|---|---|
| Corporate tax | 22% | Credit institutions under a special regime 29% |
| Withholding tax on dividends to an Israeli shareholder | 5% | The treaty does not reduce it |
| Withholding tax on interest | 15% under the law, 10% under the treaty | The treaty requires proof of Israeli residence |
| Withholding tax on royalties | 20% under the law, 10% under the treaty | |
| VAT | 24% standard, 13% and 6% reduced | A 30% reduction on certain islands |
| Capital increase tax | 0.2% | Does not apply to the capital on formation. In an AE a 0.1% levy to the Competition Commission also applies |
| Special real estate tax for entities | 15% of the tax value | There are exemptions, including disclosure of controlling persons |
What special regimes and incentives exist in Greece?
Greece has no general reduced corporate tax rate for small businesses. Instead there are targeted incentives, and according to PwC's summary the main ones are:
- Research and development: a deduction of 100% of research expenditure, rising from 2025 to 150% for qualifying collaborations, and up to 215% for small and medium-sized enterprises in certain conditions.
- Patents: a tax exemption for up to three years on profit from an internationally recognised patent developed in the company, and under Law 5162/2024 a further 10% exemption for the following seven years.
- The Development Law (amendment to Law 4887/2022 of June 2025): tax exemptions, grants and employment subsidies, with a minimum investment of one million euros for a large business down to 100,000 euros for a very small business.
- Strategic investments: for large projects, for example above 75 million euros, with the possibility of a tax exemption for up to 15 years.
- Law 89 office: a structure for a foreign company that provides services only to the parent company or to group companies, under a special licence. Details are in the guide on an Israeli company operating in Greece.
How does VAT work in Greece for a company?
The standard VAT rate in Greece in 2026 is 24%, the reduced rate 13% and the super-reduced rate 6%, according to PwC's tax summary (as of November 2026). On certain islands in the Aegean and the Dodecanese the rates are reduced by 30%, to 17%, 9% and 4%. A Greek company receives a VAT number on formation through the one-stop service. Reporting and invoices go through the myDATA system of the Greek tax authority (AADE), and in 2026 a B2B e-invoicing obligation is being phased in. A foreign company without a permanent establishment that makes taxable transactions in Greece checks a separate registration obligation, as detailed in the guide on an Israeli company operating in Greece.
How much tax does Greece withhold from a dividend to an Israeli shareholder?
5%, as of November 2026 according to PwC's tax summary for Greece. This is the rate under Greek law for a shareholder who is not resident in Greece, and the tax treaty between Israel and Greece does not reduce it. In PwC's treaty table for Greece, the dividend rate for Israel is marked “domestic rate”, and the corresponding table for Israel states that in the opposite direction the domestic Israeli rate also applies.
The withholding exemption under the EU Parent-Subsidiary Directive applies only to a parent company resident in Greece or in an EU member state that holds at least 10% for more than 24 months. An Israeli company does not meet this condition, so the 5% also applies to a dividend to an Israeli parent company.
The double taxation treaty was signed in Jerusalem on 24 October 1995 and ratified in Greece by Law 2572/1998. Details of its provisions on real estate are in the guide to Israel's tax treaties. For dividends, interest and royalties, the rates in this guide are taken from PwC's tax summaries for Greece and Israel.
And what is withheld on interest, royalties and management fees?
According to PwC's tax summary (as of November 2026), on interest Greece withholds 15% under the law, and the treaty limits it to 10%. On royalties the law sets 20%, and the treaty limits it to 10%. Management, consultancy and technical service fees paid to a foreign company without a permanent establishment in Greece are not subject to withholding in Greece according to PwC's summary. To benefit from the treaty rate, the recipient of the payment must prove that it is an Israeli resident, usually with a certificate of residence from the Israel Tax Authority.
A shareholder loan and management fees are a common way to take money out of a Greek company, but they must be at market price and documented, otherwise the Greek tax authority may not recognise the expense. For non-bank loans, stamp duty should also be checked: according to PwC, a digital transactions levy of 2.4% applies to loans and credit, up to a ceiling of 150,000 euros per loan, and not to interest, bonds and bank loans.
How much tax is paid in Israel on a dividend from a Greek company?
An individual resident in Israel pays 25% on the dividend, and a substantial shareholder (someone holding 10% or more of the means of control) pays 30%, under section 125B of the Income Tax Ordinance (as of November 2026). The 5% withheld in Greece is credited against the Israeli tax. Above the annual threshold the Israeli surtax also applies. When the shareholder is an Israeli company, according to PwC a dividend from a foreign company is generally taxed in its hands at 23%, and in certain circumstances it may elect a credit for the Greek corporate tax as well. Details are in the guide for an Israeli investor in a foreign project company.
The example in the table assumes a profit of 100 euros before tax in the Greek company, distributed in full. It does not include surtax, exchange differences or the election of an indirect credit, and is for illustration only:
| Scenario | Corporate tax in Greece | Withholding tax in Greece | Tax in Israel after credit | Total tax burden | Net to the shareholder |
|---|---|---|---|---|---|
| Individual, not a substantial shareholder (25%) | 22 | 3.9 | 15.6 | 41.5 | 58.5 |
| Individual, substantial shareholder (30%) | 22 | 3.9 | 19.5 | 45.4 | 54.6 |
| Israeli company (23%, without electing an indirect credit) | 22 | 3.9 | 14.04 | 39.94 | 60.06, before onward distribution to its shareholders |
Will the Greek company be treated as a controlled foreign company?
Usually not, but it should be checked. Under section 75B of the Ordinance, one of the conditions for a controlled foreign company is that the tax on its passive income abroad does not exceed 15%. Greek corporate tax is 22%, so an ordinary Greek company usually does not meet this condition. However, a company that benefits from exemptions or enhanced deductions, or whose income is mostly passive, such as interest or rent, needs an annual check of its effective rate.
What happens if the Greek company is managed from Israel?
It may also be treated as an Israeli resident and become liable to corporate tax in Israel, and this is one of the biggest risks in the structure. Under section 1 of the Ordinance, a body of persons whose business is controlled and managed in Israel is an Israeli resident. At the same time, Greece considers a company resident if it was incorporated there or its place of effective management is in Greece. The result may be dual residence decided under the treaty, with a dispute with two authorities. A local manager with powers, board meetings in Greece and documentation of decision-making there reduce the risk.
Salary or dividend for an Israeli manager of the Greek company?
There is no single answer, and the decision depends on the amounts and on where the work is performed: a salary is a deductible expense for the company, while a dividend is distributed out of profit after 22% corporate tax and 5% withholding. A manager who receives a salary from the Greek company is taxed in Greece under the salary tax brackets, which according to PwC apply from 1 January 2026: from 9% up to 10,000 euros to 44% above 60,000 euros, with lower brackets depending on the number of children and for young people up to age 30. In addition, social security contributions (EFKA) apply at 21.79% for the employer and 13.37% for the employee, up to a monthly ceiling of 7,761.94 euros from 2026.
In Israel, an Israeli resident is liable to tax on worldwide income, and the tax paid in Greece on the same income is credited up to the amount of the Israeli tax. Which country may tax salary or directors' fees is determined by the relevant treaty articles and depends on where the work is actually performed, so they should be checked before setting a remuneration structure.
| Consideration | Salary | Dividend |
|---|---|---|
| Tax in Greece | Brackets of 9% to 44%, and social security contributions | 22% corporate tax and 5% withholding tax |
| Deductible expense for the company | Yes, if the salary is reasonable and reflects real work | No, distributed from profit after tax |
| Tax in Israel | Ordinary income tax, with a credit for the Greek tax | 25% or 30%, with a credit for the 5% |
| Main risk | The question of where the work is performed and social security charges | The company's residence and the controlled foreign company rules |
When does an Israeli company create a permanent establishment in Greece?
When it has a fixed place of business in Greece, a dependent agent contracting on its behalf, or a building site lasting more than three months, under Greek law as summarised by PwC (as of November 2026). Greek law defines a permanent establishment according to the OECD Model: a fixed place of business through which the company's business is carried on, such as an office, a branch, a factory or a place of management. According to PwC, a building site or installation project in Greece is a permanent establishment after three months, compared with 12 months under the OECD Model. A dependent agent who contracts on behalf of the company may create a permanent establishment, and an independent agent usually does not. Greece reserved the right not to apply the permanent establishment provisions of the Multilateral Instrument (MLI).
Where there is a permanent establishment, the profit attributed to it is taxed in Greece at 22%, and Israel taxes the Israeli company on all its income and gives a credit. The tax treaty may set a different period for building sites from that of Greek law, so construction and service projects in Greece should be checked against the text of the treaty itself.
Branch or subsidiary: what is the tax difference?
Both are taxed in Greece on the profit from the activity there, and the main difference lies in transferring the profits: according to Deloitte, transferring profits from a branch to the parent company is not treated as a dividend and is not subject to withholding tax, whereas a distribution from a subsidiary is subject to 5% withholding. A branch of an Israeli company is taxed in Greece like a Greek company, on the profit attributed to the activity in Greece. A subsidiary is a separate entity that limits liability. The full comparison, including registration and liability, is in the guide on an Israeli company operating in Greece.
When is corporate tax filed and paid in Greece?
According to PwC's tax summary (as of November 2026), the return is filed by the last day of the sixth month after the end of the tax year, i.e. by 30 June for a calendar year, and the tax is paid in six monthly instalments. The details:
- Tax year: a calendar year, or a year ending on 30 June for companies keeping double-entry books, and not more than 12 months.
- Filing the return: online, by the last day of the sixth month after the end of the tax year.
- Payment: the tax and the advance are paid in six equal monthly instalments, the first by the end of the seventh month after the end of the year.
- Advance: 80% of the current year's tax, with a 50% reduction for a new company in its first three years of activity.
- Limitation: as a rule five years from the end of the year in which the filing deadline fell, with extensions in certain cases.
What is important to know about a Greek company that holds real estate?
A company holding properties in Greece has an additional layer of taxation (as of November 2026): an annual ownership tax (ENFIA) at 5.5 per thousand on the rights of legal entities, and a special real estate tax of 15% of the tax value according to the Deloitte Legal review (2024), with exemptions. Transfer tax on acquiring a property is 3.09%, and a transfer of shares in a non-listed company is exempt from stamp duty and VAT and is not subject to real estate transfer tax. Details are in the guide to real estate taxation in Greece and the guide to ENFIA.
What should be checked before distributing profits to Israel?
Make sure there are distributable profits, withhold and pay the 5% in Greece, and coordinate the tax and reporting in Israel in advance with an Israeli accountant. The checklist:
- Make sure the financial statements have been approved and that there are distributable profits under Greek company law.
- Calculate the Greek withholding tax (5% on dividends) and make sure it is reported and paid.
- Obtain a certificate of the tax withheld, for the credit in Israel.
- Check with an Israeli accountant the tax rate in Israel, substantial shareholder status and surtax.
- Consider whether another payment, such as repayment of a shareholder loan or management fees at market price, is more suitable to the circumstances.
- Report the dividend and the holding in the foreign company in Israel on time.
This guide is general information and is not tax advice. Every structure needs a specific review by an accountant in Greece and in Israel according to the figures and the current law.
More on doing business in Greece: Setting up a company in Greece · An Israeli company operating in Greece · Commercial disputes and litigation in Greece · Comparison of 8 countries · All guides for companies and businesses
Frequently asked questions
What is the corporate tax rate in Greece in 2026?
22% on a company's taxable profit, as of November 2026 according to PwC's summary reviewed in September 2026. Credit institutions that elected a special regime pay 29%, and shipping profits are taxed under the tonnage tax regime.
How much tax does Greece withhold on a dividend to an Israeli?
5% under Greek law, as of November 2026. The tax treaty between Israel and Greece does not reduce this rate, so it applies both to an Israeli individual and to an Israeli company. The 5% is credited against the tax in Israel.
Is there a tax treaty between Israel and Greece?
Yes. The treaty was signed on 24 October 1995 and ratified in Greece by Law 2572/1998. According to PwC's summaries, it limits withholding on interest and royalties to 10%, and does not limit withholding on dividends.
How much tax does an Israeli pay on a dividend from a Greek company?
In Israel an individual pays 25% on a dividend, and a substantial shareholder 30% (as of November 2026), and receives a credit for the 5% withheld in Greece. Together with Greek corporate tax, the total burden on fully distributed profit is about 41.5% to 45.4% before surtax.
Is a Greek company a controlled foreign company in Israel?
Usually not, because one of the conditions is foreign tax not exceeding 15%, and Greek corporate tax is 22%. A company with exemptions, enhanced deductions or mainly passive income needs an annual check of its effective rate.
What is the VAT rate in Greece in 2026?
24% standard rate, 13% reduced rate and 6% super-reduced rate, as of November 2026 according to PwC's summary. On certain islands in the Aegean and the Dodecanese the rates are reduced by 30%.
Salary or dividend from a Greek company - which is better?
There is no single answer. A salary is a deductible expense for the company but is taxed at brackets of 9% to 44% and social security contributions, and a dividend is taxed at 22% at company level and 5% withholding before the tax in Israel. The decision depends on the amounts, the place where the work is performed and the treaty provisions, and is built with an accountant.
When does a construction project in Greece create a permanent establishment?
Under Greek law, a building site is a permanent establishment after three months. The tax treaty may set a different period, so the text of the treaty should be checked before the project begins.
Read next · 13 min readAn Israeli Company Operating in Greece: Branch or Subsidiary, Permanent Establishment, VAT, Employing Staff and an Annual Compliance CalendarAn Israeli company in Greece: branch, subsidiary, Law 89 office or direct activity, permanent establishment, VAT representative, 920-euro minimum wage.Read the guideSources
- PwC Worldwide Tax Summaries - Greece, Corporate: Taxes on corporate income (reviewed 8.9.2026)
- PwC Worldwide Tax Summaries - Greece, Corporate: Withholding taxes
- PwC Worldwide Tax Summaries - Greece, Corporate: Other taxes
- PwC Worldwide Tax Summaries - Greece, Corporate: Tax administration
- PwC Worldwide Tax Summaries - Greece, Corporate: Corporate residence
- PwC Worldwide Tax Summaries - Greece, Corporate: Tax credits and incentives
- PwC Worldwide Tax Summaries - Greece, Individual: Taxes on personal income
- PwC Worldwide Tax Summaries - Israel, Corporate: Withholding taxes (Greece row)
- Israeli Income Tax Ordinance (Wikisource, Hebrew)
- UN Treaty Series No. 40499 - Israel and Greece, Convention for the avoidance of double taxation (1995)
- Deloitte Legal - Doing business in Greece (Legal 500, July 2024)
