Greece Ranks 27th in OECD International Tax Competitiveness Index

Greece ranks 27th among the 38 OECD countries in this year’s International Tax Competitiveness Index (ITCI), which measures the extent to which a country’s tax system adheres to two important aspects of tax policy: competitiveness and neutrality.

The data is highlighted in a report by Greece’s Center for Liberal Studies (KEFIM), published in collaboration with the Tax Foundation.

Greece’s rank remains unchanged from 2023, positioned between Belgium in 26th place and Denmark in 28th. Notably, Greece ranks higher than the United Kingdom, Spain, Iceland, and Portugal, with France and Italy in 36th and 37th places, respectively. Estonia tops the index for tax competitiveness, while Colombia is placed last.

Ranking of countries in the International Tax Competitiveness Index 2024. Photo source: KEFIM

In 2023, Greece received a total score of 60.9 on the Index, with the following placements in individual categories:

– 17th in corporate taxation
– 9th in taxation of private citizens
– 34th in consumption taxes
– 27th in property taxes
– 21st for income from abroad taxation

Shortcomings of the Greek taxation system

This year’s report highlights several shortcomings in the Greek taxation system, including:

– Companies in Greece face stringent limitations on the amounts of net losses they can use to offset future profits and cannot use losses to reduce taxes on revenues taxed in previous years.
– Greece has a relatively small number of foreign tax agreements, totaling 58, while the OECD average is 75.
– With a VAT rate of 24 percent, Greece has one of the highest rates among OECD countries, yet it has one of the most limited tax bases, covering only 37 percent of final consumption.

Positive aspects of the Greek tax system

Despite these challenges, the report identifies positive features of the Greek tax system. For example, the dividend tax rate for individuals is only 5 percent, compared to an OECD average of 24.7 percent. Additionally, the corporate tax rate is set at 22 percent, below the OECD average of 23.9 percent.

Global tax reforms on the horizon

KEFIM Executive Director Nikos Rompapas said that Greece’s historically low placement in the ITCI can be significantly improved “even without the horizontal tax cuts currently imposed on private citizens and companies”.

On his part, Daniel Bunn, President and CEO of the Tax Foundation, noted that with elections taking place in many countries this year, “important changes” in tax policies globally are expected.

“The taxation landscape is continuously evolving, and decision-makers must prioritize improving their countries’ rankings to attract investment and enhance development prospects,” said Bunn.