How are foreign residents taxed?


Taxpayers who have their tax domicile abroad and are registered as such in the tax office of foreign residents are taxed in Greece and have the obligation to file a statement only for the income that arises in our country.

This applies both to the Greeks who have transferred their tax residence abroad due to the transfer as well as for the foreigners.

Therefore, a foreign resident taxpayer will be taxed on the basis of our domestic law, for example, for the rents received from real estate in Greece, for dividends from shares of Greek companies, for profits from holdings in domestic Ltd, Single Member P. C., for interest on deposits with domestic banks, for salaries from an employer / company established in our country, etc.

However, if the recipient is a resident of a country with which Greece has a double taxation convention (all EU, EEA, USA, Canada, China, etc.), it will be taxed in accordance with the provisions of the relevant contract.

Although all bilateral conventions are not the same, most of them usually predict that, for example, property income is taxed in the country in which the property is located, dividends, interest and royalties are subject to withholding tax (at specified rates) in the country of origin, the income from doing business is taxed only in the country of residence of the professional, unless he/she has a permanent professional base in Greece, etc.

Foreign resident taxpayers are not entitled to the tax deductions for earned income and pensions they acquire in Greece, unless they are tax residents of the EU or EEA and acquire at least 90% of the world's income in Greece, or demonstrate that their taxable income is so low that they would be entitled to the tax reduction under the tax law of their country of residence.

Furthermore, a foreign resident taxpayer should examine under the tax laws of his/her country of residence if he/she is required to declare the income earned in Greece.

In this (routine) case, the possibility of crediting the tax paid in our country for this income should be investigated against the tax owed to the rest of the world.

On the other hand, if a tax resident does not acquire real income in Greece, one has no obligation to file a tax return in our country.

It is stressed that for foreign taxpayers the living conditions do not apply, so such a person will not be taxed for the imputed income resulting from the maintenance of, for example, a car or a holiday home in Greece.

Also, the presumption of acquiring property (real estate, vehicles, etc.) does not apply to these persons, provided that they do not obtain real income in our country.

Foreign tax residents with tax obligations in Greece are required to designate a tax representative with a tax residence and address in Greece, who will receive their correspondence with the tax administration.

The tax representative does not assume any responsibility for the fulfillment or otherwise of the tax obligations of the tax resident abroad.

Taxes on real estate

Foreign resident taxpayers are normally subject to a property transfer tax or VAT on the purchase of real estate or real estate rights (usufruct, small property, etc.) located in our country.

However, for EU citizens and the EEA, to some expatriates and others the possibility of tax exemption for the acquisition of first residence is conditional.

Furthermore, foreign tax residents who have a property in Greece must have a VAT identification number (already at the time of the relevant purchase contract, etc.), submit electronically the statement (E9) of their real estate, to state the relevant changes etc.

On the basis of this statement, a property tax (principal and supplementary) is certified and due annually, as is the case for the tax residents of Greece.

G. Samothrakis, J. Panou
Posted on Sunday newspaper KATHIMERINI, on 04/02/2018

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