Freelancers in Greece need to be familiar with the tax regulations to make sure all their process of invoice and billing is accurate. This is very important for having safe and smooth invoice handling and optimizing their financial management. Handling invoices without a company can be challenging without knowing the tax forms therefore it is very important to use the right tool for staying on the right side of the law.
Below, we will see the tax forms to be learned in Greece for freelancers.
1. VAT Registration (FPA - ΦΠΑ)
If your annual income exceeds the limit set by the Greek tax authorities, then you need to register yourself in the VAT department. Value Added Tax (VAT), known as FPA (Φόρος Προστιθέμενης Αξίας) in Greek. The limit depends on your profession.
To register for VAT, you’ll need to complete the VAT Registration Form (Ε3 - Ειδικό Σημείωμα ΦΠΑ). This form includes details about your business activities and financial status. Once registered, you’ll be required to file periodic VAT returns (usually quarterly or annually) using the VAT Return Form (ΦΠΑ).
2. Income Tax Return (Ε1 - Δήλωση Φόρου Εισοδήματος)
If you are considered a self employed individual as a freelancer in Greece, that means your income is subject to personal income tax. The primary form for reporting your income is the Income Tax Return Form (Ε1 - Δήλωση Φόρου Εισοδήματος). This form is used to declare your total annual income, including income from freelance work, and to calculate your tax liability.
The Ε1 form requires detailed information about your income and expenses.
- Income Details: You need to report all of your sources of income that includes your freelance income as well.
- Expenses: Deductible business expenses can be claimed to reduce your taxable income. These might include office supplies, travel expenses, and other costs directly related to your freelance work.
- Tax Credits and Deductions: Include any applicable tax credits or deductions, such as those for social security contributions or donations to charities.
3. Detailed Expense Report (Ε3 - Κατάσταση Εσόδων-Εξόδων)
Alongside the Ε1 form, freelancers are also required to submit the Detailed Expense Report Form (Ε3 - Κατάσταση Εσόδων-Εξόδων). This form provides a breakdown of your business expenses and is essential for calculating your net taxable income.
The Ε3 form requires:
- Detailed Expenses: List all business-related expenses, categorized appropriately. This includes rent for office space, utility bills, professional fees, and any other operational costs.
- Income Details: You must also detail your gross income for the year.
4. Social Security Contributions (ΑΠΔ - Αναλυτική Περιοδική Δήλωση)
Freelancers in Greece are required to make social security contributions to the Social Security Organization (ΕΦΚΑ - Ενιαίος Φορέας Κοινωνικής Ασφάλισης). To report and pay these contributions, you will use the Detailed Periodic Statement Form (ΑΠΔ - Αναλυτική Περιοδική Δήλωση).
This form is used to declare your earnings and calculate your social security contributions, which cover health insurance, pensions, and other social benefits. The ΑΠΔ form must be filed periodically, usually monthly, and it’s important to keep up with these contributions to avoid penalties and ensure your eligibility for social benefits.
5. Annual Tax Statement (Δήλωση Φορολογίας Εισοδήματος Φυσικών Προσώπων)
At the end of the fiscal year, you will need to file an Annual Tax Statement (Δήλωση Φορολογίας Εισοδήματος Φυσικών Προσώπων). This statement consolidates all your income and expenses for the year and ensures that your tax obligations are met. It includes information from the Ε1, Ε3, and any other relevant forms.
6. Preliminary Tax Payment (Προκαταβολή Φόρου)
In Greece, freelancers are required to make Preliminary Tax Payments (Προκαταβολή Φόρου). These are advance payments based on the previous year’s tax liability and are made throughout the current year. The amounts are calculated and declared through the Ε1 form, and they help spread the tax burden over the year.
Navigating the tax on freelancers in Greece involves understanding and completing various forms, each serving a specific purpose. From VAT registration to income tax returns and social security contributions, staying informed and organized is key to managing your tax obligations effectively.
It’s advisable to consult with a tax professional or accountant familiar with Greek tax laws to ensure compliance and optimize your tax situation. Proper management of your tax forms will not only help you avoid penalties but also contribute to a smoother and more successful freelance career.
Ruul Helps Your Freelancing Needs
Ruul provides a service to get invoices paid early, offering freelancers improved cash flow and quicker access to their earnings. It is a great billing and checkout service for freelancers.
Ruul helps accept payments for freelancers by giving them multiple options. One of them and the most preferred one is accepting credit cards. This makes all payment processes extremely easy, safe and fast for the freelancer. Ruul initiates payout within 24 hours after the transaction is done by the client which gives the freelancer quick access to their earnings.
Ruul, plays a role as your Merchant of Record, is the legal entity selling your professional services to your business clients compliantly in 190 countries. Ruul allows freelancers to sell their digital services to businesses anywhere around the world. Therefore, it is a comfortable, easy and safe tool for freelancers to be organized, manage the business from A to Z at a professional level.
