Tax Residency in Greece
1. Criteria for Determining Tax Residency in Greece
According to Article 4 of the Greek Income Tax Code (Law 4172/2013), an individual is considered a tax resident in Greece if they meet any of the following criteria:
- They have their permanent residence in Greece.
- They reside in Greece for more than 183 days in a calendar year.
- They have the center of their vital interests in Greece.
The concept of "permanent residence" implies a habitual and continuous presence in Greece, while "center of vital interests" refers to the place where an individual's personal and economic ties are most closely connected.
For entities, tax residency is determined based on their place of incorporation or management and control.
2. Impact of International Tax Treaties on Tax Residency Criteria
Greece has entered into numerous double taxation treaties (DTTs) with other countries to prevent double taxation and promote cross-border trade and investment. These treaties may modify or provide exceptions to the standard criteria for tax residency as defined in domestic law.
For example, under the Greece-Cyprus DTT, an individual is considered a resident of Greece if they have a permanent home available to them in Greece and spend more than 183 days in Greece in a calendar year. However, if the individual also has a permanent home available to them in Cyprus and spends more than 183 days in Cyprus in a calendar year, they will be considered a resident of Cyprus.
In such cases, the DTT provides a tie-breaker rule to determine the individual's tax residency. The tie-breaker rule considers factors such as the individual's personal and economic ties to each country, as well as the duration and nature of their stay in each country.
These treaty-specific modifications aim to provide clarity and prevent double taxation by establishing clear rules for determining tax residency in cases involving cross-border activities. They reflect the mutual agreement between Greece and the other treaty partner to facilitate tax compliance and enhance economic cooperation between the two countries.
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