Probing tax residents abroad

The tax administration is examining the taxpayers who, although they have declared their permanent residence outside Greece, live and work in the country.

Most of them have chosen a country with low tax rates and at the same time avoid the presumed income that applies in Greece and the inspection of their bank deposits.

The auditors of the Independent Authority for Public Revenue (AADE) are looking for those who normally live in Greece, but declare themselves tax residents abroad, in order to avoid taxes and audits. They are particularly focusing on those in the service sector who can work simply with a laptop from anywhere.

Sending a circular to the auditors, AADE has made it clear what the basic conditions are to qualify as a genuine tax resident abroad: The taxpayer must reside abroad for at least 183 days per annum, be able to prove it by presenting the appropriate supporting documents, and entrust their tax representation to a trusted person – i.e. a tax representative.

According to the legislation, those who move their tax residence abroad are exempt from the presumed cost of living (“tekmiria”) for the assets they have in Greece. In other words, the tekmiria for houses, cars and recreation boats do not apply to them. Also, the tekmiria of acquisition of assets (real estate, vehicles, etc) do not apply provided that they do not acquire real income in Greece. If they do obtain income in Greece, for example from rent or interest on deposits, then they fall under the regime of presumed incomes.

On the other hand, many Greeks who left during the years of the financial crisis and the bailouts and had become tax residents abroad are returning with favorable terms; they make the most of the provisions that stipulate that those (Greeks or foreigners) who relocate in tax terms to Greece will have a discount of 50% from the taxation of their incomes, provided that they will be employed in new jobs or start an activity as self-employed professionals.