Limited tax liability in Greece for the foreign employees of foreign companies established in Greece accrording to L.89/1967
By a recent circular (Pol. 1155/21-7-2011) the Ministry of Finance provides guidance on the tax treatment of foreign individuals that are employed in Greece by a company established in Greece according to the provisions of Law 89/1967. The circular clarifies that such foreign employees are subject to Greek income tax only for their Greek sourced income and not for their global income.
Law 89/1967 provides for a special tax regime that applies to foreign companies establishing an office in Greece through which services are provided to the head office abroad or to other companies of the same group that are not established in Greece; such services include consulting, logistics, quality control, marketing, advertisement etc. The foreign company establishing an office of Law 89/1967 In Greece is obliged to employ at least 4 persons in Greece, which is often foreign personnel. Following this circular, the Ministry clarifies that the foreign personnel of these offices is always treated in Greece as non-tax residents.