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Greek tax residents those who have been in Greece for a year


Some light on the labyrinthine map of tax residence is trying to give a brand-new circular of the Ministry of Finance. An effort is made to comply with international standards and OECD directives while what remains constant is that everything is subject to judgment and interpretation of the auditor and that what the taxpayer declares can be used against him. Interesting fact is that it becomes clear that even … tourists who do not work but stay for a year in Greece are considered by the authorities to be Greek tax residents.

As it is already known, according to the tax law, an individual is a resident of Greece if he has in Greece “his permanent or main residence or habitual residence or the center of his vital interests, namely his personal and financial ties” In case any of the above applies, it is not examined if there is a stay of more than 183 days as the taxpayer is considered a resident of Greece even if he has not completed this duration for his stay in the country.

According to the circular, it is clarified that in cases of inspection all individual elements must be considered and the provision for the center of vital interests has been reformulated, which should take into account all elements of its personal and economic ties in a place. Also, incidents must be considered in their factual circumstances and as a whole and not in isolation.

For example, a very important point mentioned in the circular is the fact that just a business activity in Greece does not make a taxpayer resident in Greece if he has organized his life abroad. More specifically, it is literally stated that “the acquisition, existence or maintenance of only one capacity in the country (status of executive or non-executive member of the Board of Directors of a S.A. or manager of Ltd. or P.C. or partnership or participation in the administration or management of a legal entity) or the individual exercise of an activity in the country [(exercise of real estate business activity or agricultural business activity or exercise secondarily (intermittent or incidentally), activity (profession or business)], is not sufficient to establish tax residence in Greece, when the individual proves that he has organized his life permanently and continuously abroad »

In any case, although circular number 2064/2023 for the first time gives a more specific definition of the above concepts, the fact that they are all subject to (vague) interpretation of the principles is in itself a problem. For example, there is talk of established routines and regular visits, terms that different people interpret differently and, in our opinion, could be made clearer using numerical data so that the subject matter of interpretation is limited as much as possible. But let’s see what the circular says verbatim:

Permanent residence: “refers to the residence in Greece, which an individual has in his possession or at his disposal, at any time and continuously, and uses it on a permanent and not on an occasional basis (e.g., for a leisure trip, business or educational trip, such as attending a seminar, etc.). For example, a dwelling owned by an individual cannot be considered to be available to him during a period when the dwelling is rented to another individual, as the owner does not have possession of the dwelling during that period and therefore the dwelling is not freely “at his disposal”.
It should be pointed out that the concept of permanence of residence lies in the fact that the natural person has organised and maintains the dwelling in such a condition as to permit permanent use, as opposed to a stay in a specific place under circumstances which are clearly limited to short stays.’

Main residence: “shows the difference compared to secondary residence. Consequently, and in case an individual has one or more secondary residences abroad, but his main residence, in which he has his real establishment, is located in Greece, he is tax resident in Greece. It is clarified that any dwelling (detached house, apartment, rented furnished room, etc.) should be taken into account, whether owned by the individual, rented by him or granted to him free of charge, provided that this space can be used as a residence”.

Habitual residence: of the natural person refers to his/her residence in the country and in this case in Greece. Place of habitual residence is the place where a person is systematically or habitually present. The usual residence, following para. 19 and 19.1 of the interpretative commentary on Article 4 of the Model Convention, is not determined on the basis of a specific number of days but refers to frequency, the duration and regularity of the stay which forms part of the established routine of the individual’s life and is not due to exceptional, extraordinary or transitional circumstances. Consequently, the concept of habitual residence is not defined on the basis of a specific period of time, but is interpreted in such a way as to cover a sufficient period of time sufficient to ascertain the frequency, duration and regularity of the stay which forms part of the established routine of the natural person’s life. Moreover, and following Para. 17 and 18 of the interpretative comments of Article 4 of the Model Convention, in order to establish the habitual residence of the individual, not only his residence in his permanent or main residence, but also his possible residence in any other part of the country, in this case in Greece, should be examined. In addition, and in case the natural person does not have a permanent or main residence available but e.g. stays successively in hotels in Greece, all individual visits to these hotels should be taken into account, without however being required to evaluate the reasons for these visits.

Centre of vital interests: refers to the centre of the life relations of the individual, which, as is apparent from the provision, exists where that person develops his personal and economic ties.

The  personal ties of the natural person: they are determined by the residence of the members of his/her family, which includes not only his/her spouse and children, but also members of his/her extended family (e.g. parents, siblings, other relatives). In addition, the concept of personal ties includes the social ties of the individual, which are defined by the political, social and other activities, its social relations, links with public authorities and bodies (e.g., insurance, professional, social), the place where cultural or other activities are developed, etc.

Economic ties include the professional activities of the individual (e.g. paid employment, business activity, etc.), the place of management of his property, etc.

Voluntary declaration as a Greek tax resident

According to the new directives, it is clarified that “if a person declares his intention for the future to be or become a tax resident of Greece, by making a relevant declaration or registration in the Tax Registry” then it is not examined whether he is indeed a Greek tax resident but is simply declared.

The criteria will be examined if and when a dispute arises as to whether the person in question is indeed a tax resident of Greece or not.

That is, only in cases of taxpayers who meet the requirements to be tax residents of Greece and have never declared it and never in the opposite case. In short, a taxpayer who does NOT meet the requirements to be a Greek tax resident, but declares it, becomes one.

What about the 183 days of attendance. With a year of vacation in Greece you become a Greek tax resident

In case of taxpayers who do NOT meet the above criteria, economic and social ties, habitual residence, etc. but are in Greece for a period exceeding one hundred and eighty-three days, cumulatively, during any twelve-month period, then these persons are tax residents of Greece from the first day of their presence in the country.

As it was already known, this does not apply to persons “who are in Greece exclusively for tourist, medical, therapeutic or similar private purposes” but their stay does not exceed three hundred and sixty-five days, including short stays abroad.

The day of presence in Greece is considered to be any day during which an individual is in the Greek territory, no matter how short this may be and not the overnight stay that was in force.

It is also clarified that “in case the stay of the natural person for tourist, medical, therapeutic or similar private purposes exceeds 365 days, including short periods of stay abroad, he will be considered a tax resident of Greece from the first day of his presence in Greece.”

When does someone file a tax return as a Greek tax resident?

Taxpayers who change their residence as residents of Greece, will submit a declaration with their worldwide income in the country “for the year in which the period of one hundred and eighty-three (183) days, cumulatively, is completed.” Also in the case that the period of 183 days is completed in the tax year following the year of arrival in Greece, the individual is considered a tax resident of Greece and submits a declaration for the year that the 183 days are completed in each case.
Similarly, in cases of departure from the country, if the taxpayer is in Greece for a period of more than one hundred and eighty-three days, which is completed within the year of departure, he is considered a tax resident of Greece and cannot change his tax residence for that year.

In any case, a positive sign is the effort of the Greek authorities to clarify terms and data. But this should be done in a way that does not encourage interpretation in cases where it can be avoided. This is because taxpayers risk becoming “hostages” to the views of officials who may not know and cannot take the burden of a decision that needs judgment.

For their part, taxpayers should carefully consider all the facts before making a decision. As the “moto” of our office mentions, mistakes are often paid dearly and retrospectively and certainly taxpayers should seek the advice of a qualified professional with knowledge and experience in these matters.


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