Greece, with its long history of financial turmoil and regulatory instability is one of the few European countries that relies on fiat currency for most transactions. Since the government underreported its debt obligations and defaulted on bond yield payments, the populace never regained their trust in the authorities and financial institutions. So when Bitcoin and other cryptocurrencies arrived offering an alternative financial framework, Greek residents were quick to adapt.

Although, the average Greek resident doesn’t know much about how blockchain works or what are the actual use cases of cryptocurrencies, it is likely that they’ve used crypto for transactions before. However, despite the mass adoption and the huge number of Bitcoin ATMs in the country, the authorities have yet to decide on the regulatory aspects of the crypto economy.

The lack of a concrete regulatory framework and clear guidelines on crypto taxation is a major roadblock to the growth of the crypto economy in Greece. It is even considered a dream destination for crypto enthusiasts due to the absence of tax regulations and marginal tax rates. However, not all crypto transactions are tax-free in Greece and certain regulations exist that oversee the taxation of transactions like Mining. This article is a primer of all the existing crypto regulations in Greece.

Latest Updates/Guidelines

MiFID II

Is Crypto Legal in Greece?‍

There is no clarity on the legal status of cryptocurrencies as of now. However, bearing in mind the mass adoption and growing popularity of crypto assets among residents, any regulations barring residents from using cryptocurrencies may prove to be devastating to the economy and hence it is safe to assume that investing in cryptocurrencies will not be classified as illegal by the authorities.

Within the context of Law 4514/2018 MiFID II, Law 4021/2011 EMD II, and Law 4537, PSD II, Cryptocurrencies may be classified as financial instruments, electronic money, or funds if the relevant definitions conform with the transactions. However, there is no official guidance from the HCMC or the BoG discerning the official classification of crypto assets.

This is one of the biggest reasons why crypto taxes are so complicated in Greece. Decoding the existing guidelines in the context of every transaction to identify which category the assets fall into is tedious and beyond the expertise of a regular Greek resident.

Can the HCMC Track Crypto?

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There are regulations in Greece, which require digital wallet providers and cryptocurrency exchanges to register with the Hellenic Capital Markets Commission (HCMC) and mandate digital tax records, aimed at preventing tax evasion by increasing transparency in the crypto economy. These regulations represent a significant step toward addressing tax evasion and financial opacity in Greece.

By necessitating registration with the HCMC, the Greek government gains critical visibility into the operations of digital wallet providers and cryptocurrency exchanges. This gives authorities access to investor activity, thereby making it more challenging for individuals and businesses to engage in unreported or underreported cryptocurrency transactions.

The requirement for maintaining digital tax records ensures that individuals involved in cryptocurrency activities must provide a clear and verifiable record of their transactions. This represents a significant shift in how cryptocurrency income is documented and reported. It eliminates the grey areas and ambiguities that may have existed before, making it easier for tax authorities to assess and tax cryptocurrency-related income accurately.

The Bank of Greece ensures compliance with anti-money laundering (AML) and countering terrorist financing (CFT) regulations primarily through supervision and assessment of supervised institutions. It checks these institutions' compliance with their AML/CFT obligations, evaluates the adequacy and effectiveness of their AML/CFT procedures, and issues typologies of suspicious transactions.

These regulations provide a robust legal framework for cryptocurrency activities in Greece. When crypto service providers are required to operate within established legal boundaries, it becomes more challenging for tax evaders to hide their income or engage in illegal financial activities.

How Are Crypto Transactions Taxed in Greece?

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Cryptocurrency taxation in Greece operates within a somewhat uncertain regulatory framework. While the European Court of Justice has ruled that Bitcoin and other cryptocurrencies are a means of payment, exempting them from value-added tax (VAT) at the supply level, Greece does not have clear guidelines on the taxation of crypto assets and related transactions.

For individual investors, there's a general interpretation that profits or capital gains from cryptocurrency sales could be subject to a 15% capital gains tax (CGT). However, this is merely based on the interpretations of tax lawyers and consultants. To calculate capital gains, you can subtract the acquisition price and associated costs from the sale price.

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On the corporate side, businesses involved in cryptocurrency transactions may face a 22% Corporate Income Tax rate on capital gains, considering them as business income.

This ambiguity in the Greek tax system concerning cryptocurrencies necessitates careful record-keeping and a proactive approach to taxation.

Tax on Mining Crypto

Cryptocurrency mining in Greece is hampered by the country's high electricity costs, making it less economically viable for miners. Consequently, there are relatively few domestic mining operations, with professional miners often seeking more affordable energy sources abroad. While there is a growing interest in cryptocurrency mining, particularly among women, Greece has yet to fully embrace the crypto economy.

Cryptocurrency mining in Greece is taxed when the mined cryptocurrencies are converted into traditional fiat currency and deposited into a bank account. The taxation rate for cryptocurrency gains, including those from mining, is the standard rate of 22%.

In essence, miners in Greece are required to report their mining earnings as part of their income once they exchange the mined cryptocurrencies for fiat currency and place them in a bank account. These earnings are then subject to the standard income tax rate of 22%.

Tax on Staking Crypto

Although mining and staking are fundamentally different in the way they add new blocks of transactions on a distributed ledger and validate them, most tax jurisdictions across Europe consider them to be the same from a tax perspective. The Greek tax authorities are yet to release clear guidelines on the tax treatment of staking rewards.

However, it is likely that staking rewards would attract the same tax liabilities as mining. Staking rewards would not be taxed on receipt. But as soon as you decide to convert them to fiat currency, they would be taxed at a 22% tax rate based on their market value at the time.

Note that this is speculation based on the existing guidelines and tax laws from neighbouring nations and we recommend seeking help from an experienced tax professional to gain more clarity on the subject.

Future of Crypto Taxation in Greece

The future of cryptocurrencies in Greece appears promising yet complex. Several factors contribute to this outlook. First, Greece's economic challenges have driven individuals to seek alternative investment options like Bitcoin, indicating continued interest in digital assets. Second, the Greek government's support for digital currencies suggests a favourable regulatory environment. Third, the growing number of businesses accepting Bitcoin for payments reflects a gradual acceptance of cryptocurrencies in everyday transactions.

However, Greece's history of financial instability and debt issues necessitates careful regulation and monitoring to ensure financial stability. The expected growth of blockchain-based businesses in Greece, as projected by Statista, indicates an increasing role for cryptocurrencies in the country's financial infrastructure.

Greece may see greater integration of cryptocurrencies into its financial ecosystem in the near future, making them more accessible and widely accepted. However, regulatory measures and oversight will play a crucial role in shaping this evolution, striking a balance between innovation and financial security in a nation that has experienced significant economic turmoil in the past.

Frequently Asked Questions (FAQs)

1. Is Bitcoin and cryptocurrency trading legal in Greece?

As of now, there is no official legal status for cryptocurrencies in Greece. However, there are no regulations barring residents from using cryptocurrencies.

2. How are cryptocurrencies taxed in Greece?

Cryptocurrency taxation in Greece is somewhat uncertain. For individual investors, there's a general interpretation that profits from cryptocurrency sales could be subject to a 15% capital gains tax (CGT). Corporate businesses involved in crypto transactions may face a 22% Corporate Income Tax rate on capital gains.

3. Are there specific guidelines for mining and staking taxation in Greece?

Greece lacks clear guidelines for mining and staking taxation. However, it's likely that these activities would be taxed similarly to capital gains, with a 22% tax rate when converted to fiat currency.

4. Do I need to report cryptocurrency income in Greece?

Yes, individuals and businesses in Greece are required to report cryptocurrency income once it's converted into fiat currency and deposited into a bank account.

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