Greece: Circular 2107/2025 – Tax treatment of contributions to occupational pension refunds (TEA) and group pension insurance schemes

Circular E.2107/2025 provides detailed clarifications regarding the tax treatment of contributions to Occupational Pension Funds (TEA) and group pension insurance contracts, clarifying critical aspects of the recent amendments to the Income Tax Code introduced by Laws 5078/2023 and 5178/2025. The new provisions apply retroactively from tax year 2024.

Calculation of the 20% threshold base

According to the new framework, the maximum threshold of contributions and insurance premiums that are excluded from the calculation of income from salaried employment is set at 20% of the total employee’s gross remuneration and the benefits in kind included in taxable employment income.

According to the new Circular, for the calculation of the 20% threshold, all amounts that constitute gross remuneration under labour law are taken into account, regardless of whether they are included in taxable employment income. Indicatively, the following are taken into consideration:

• statutory withholdings for employee’s mandatory social security contributions (to social security funds or TEA of mandatory insurance)
• premiums paid to group pension schemes and contributions to TEA for which burden the employee
• benefits in kind

Defined benefit group pension plans The Circular further clarifies that the 20% threshold does not apply to defined benefit pension plans that were already in force at of the effective date of Law 5078/2023 (i.e. 20.12.2023) and the relevant insurance premiums continue to be fully excluded from taxable income.

Taxation of pension benefits

In typical group pension plans, amounts accumulated up to 31.12.2023 are taxed under the previous regime, while amounts accumulated from 1.1.2024 onwards are taxed in accordance with the new tax rates, taking into account the total insurance period.

In defined benefit group pension plans, where the benefit is received by the employee after 1.1.2024, the new tax rates of Article 15 par. 4a of the Income Tax Code apply to the entire amount of the benefit.

Health and medical insurance contributions and premiums

The Circular extends the tax exemption for contributions and insurance premiums of up to EUR 1,500 per year per employee for life, health or disability insurance, clarifying that the exemption now also covers the employee’s spouse and dependent children.

The above threshold constitutes a single, unified cap and applies on a cumulative basis to all relevant insurance premiums, irrespective of whether such premiums are paid by the employee or the employer