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Reply To: Tax Update

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      • BIC Junior Member
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      Member since: 12th October 2011

      I have just received the following notification on Ex Pat Greek tax for 2012-2013. Still not 100% clear but may be of interest

      New Law Regarding Non-Greek tax residents
      POL .1142/2012 AND POL.1145/2012 
      The basic elements are the following:
      An individual is considering Greek tax resident, if stays more than 183 days in a term of a year (par. 1, article 2).
      However, the meaning of residence is different from the meaning of tax domicile, especially when the individual is transferred to non-cooperative countries and countries with preferential tax treatment *(par. 5 & 6, Article 76).
      It is tax residence’s obligation to proof where individual has his/her permant residence (par. 7, Article 61).
      The tax residence must be supported by necessary supporting documentation **(par.8, Article 61 & POL.1145/12).
      Imputed income (cost of living) is not applied for non Greek tax residents, unless they have a income from Greek source. (case. h’, Art. 18).
      Non Greek tax residents lose their tax-relief of 5.000 € if they have income from a Greek source (ex. Rental Income) (§ 12, Article 9)
      The possibility of credit tax paid abroad is given only to countries with which Greece has already signed an Agreement on the Avoidance of Double Taxation – hereafter ADT (par. 8, Art.9). 
      Documentation of tax residence
      As mentioned in paragraph 8 of Article 61 and POL.1145/12, individuals who declare place of residence or habitual residence in abroad must bring the following documentation until 30/11/2012:
      A) a tax residence certificate for countries with which Greece has signed an ADT(.Avoidance of Double Taxation)
      B) a copy of Income Statement and certificate of residence for other countries. 
      Concerning, the fact that, POL.1145 does not clarify whether documentation of tax residence should be made [ch8203][ch8203]on an annual basis or not. This process was not automatic, but it went through the regulatory functions of the Head of Tax for Non –Greek Tax Residents, so there were many people, who remain liable abroad, while having their usual residence in Greece. 

      * Countries of paragraph 4 of Article 51A (uncooperative states)
      Uncooperative states are those that are not states – members European Union, and their situation on transparency and exchange information in tax matters has been considered by the Organization for Economic Cooperation and Development (OECD), and:
      a) Have not concluded a contract with Greece of administrative assistance in tax matters and
      b) Have not signed such a contract of administrative assistance with at least twelve other states.
      Such states are: Andorra, Bahrain, Bermuda, Belize, Virgin Islands (BVI), Costa Rica, Hong Kong, Lebanon, Liberia, Liechtenstein, Malaysia, Monaco, Panama, Philippines, Singapore etc.. 
      For those States, even if the person liable for his statement, transfers his residence/ ordinarily residence there, then he is considered to have his tax residence in Greece and so, he is subject to tax on his own worldwide income under the current tax bracket. 

      ** Based on our experience on tax matters in other countries such as England, Holland, Switzerland, Germany and Cyprus, here are some of the documents required of residence:
      1.       Proof of Residence in a Host Nation: Since the most important element of the proof of residence is the time spent abroad, the most powerful evidence is the airline tickets and stamps of the passport for entry and exit from a country.
      2.       Income tax return: the individual must be able to prove that he made an tax return to the country where he has his normal residence and he was liable pay tax on it.
      3.       Supporting documents of Accommodation & Labour: L bour, insurance and permanent residences abroad constitute evidence of change in tax residence. Residence certificate can be issued by Greek embassies and consulates.
      Although, it remains unspecified, whether the documents will be submitted together with the declaration of change or they will be submitted each year

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