Greece will raise taxes on some of the profit-linked compensation paid to corporate executives and board members beginning in 2027, targeting a relatively small group of highly paid managers while leaving ordinary shareholder dividends untouched.
Under the changes presented by the Ministry of National Economy and Finance, executive compensation paid out of corporate profits will face a 15% tax on the portion exceeding €60,000 a year, up from the current 5%. The first €60,000 will continue to be taxed at 5%.
The new regime, which takes effect Jan. 1, 2027, applies to remuneration received by board members and senior executives in the form of distributions from the profits of a company or other legal entity. The €60,000 threshold is central to the measure: the higher rate applies only to income above that level rather than to the executive’s entire profit-based compensation.
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The government estimates that roughly 1,400 executives will be affected, making the measure considerably narrower than a general increase in Greece’s dividend tax.
For an executive receiving €50,000 a year through a profit distribution, for example, nothing changes. The tax remains €2,500, based on the existing 5% rate.
An executive receiving €100,000 would see a more significant increase. Under the current system, the tax bill is €5,000. From 2027, the first €60,000 would generate €3,000 in tax, while the remaining €40,000 would be taxed at 15%, or €6,000. The total bill would rise to €9,000, an increase of €4,000.
The effect becomes more pronounced further up the pay scale. On €200,000 of profit-linked compensation, the tax would increase to €24,000 from €10,000. An executive receiving €500,000 would pay €69,000, compared with €25,000 under the current regime—a €44,000 increase.
The overhaul is part of an effort by Finance Minister Kyriakos Pierrakakis and his economic team to narrow what the government regards as an unusually large tax advantage enjoyed by this form of executive compensation.
At present, qualifying profit distributions to executives are taxed at 5%, substantially below the rates applied to some other forms of incentive compensation. Greece imposes a 15% rate on capital gains from certain transfers and on qualifying gains associated with stock options. By lifting the rate on high-value profit-linked executive payments, the government is seeking to bring the treatment of different forms of compensation closer together.
Athens, however, is stopping short of eliminating the incentive for companies to tie management compensation to profitability. Even after the increase, the government says such payments will retain favorable treatment compared with ordinary employment income. The authorities are also taking into account that the money is distributed from corporate profits that have already been subject to Greece’s 22% corporate income-tax rate.
One important distinction is likely to matter to investors: the measure doesn’t change the taxation of ordinary shareholder dividends. An investor receiving dividends because of an equity stake in a company will continue to face the existing 5% dividend tax. The higher rate is aimed specifically at distributions that constitute remuneration for executives and board members.
That distinction limits both the number of people affected and the measure’s fiscal impact. The government estimates that dividend-related income tax collected from the executives covered by the new rules amounted to roughly €12 million in 2025. The tax change could generate as much as €24 million in additional government revenue.
