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Transfer of tax residency abroad. What changes from 2018?

The recent No 1201/2017 Decision of the Independent Authority of Public Revenues of the Ministry of Finance redefined the administrative procedure according to which a natural person who is a tax resident of Greece can transfer his tax residency abroad for the tax year 2016, submitting the relevant application during 2017.

According to the clarifications provided by the above Decision, the procedure and documents needed for the transfer of residency for tax purposes abroad are the following:

  1. The natural persons, who wish to transfer their tax residence abroad, have to submit to the Department or Bureau of Compliance and Taxpayers Relations of their competent tax office until the last workday of the first ten (10) days of March of the tax year following the tax year of departure, the following documents:
  2. a)a M0 Tax Form accompanied (attachments) by the completed TAX forms M1 (“TIN return statement/Changes of Personal Data”) and M7 (“Taxpayer’s Representation Statement”) and
  3. b)a Solemn Declaration In Writing (with the authenticity of the signature certified) about the appointment of a tax representative in Greece.
  4. The official of the Tax Office receives the above documents and completes the relevant electronic application concerning the change of tax residence.
  5. The latest until the last day of the first ten (10) days of Septemberof the tax year that follows the tax year of departure, the following documentation should be submitted to the above competent Department of the Tax Office:
  6. a)a Tax Residence Certificate issued by the competent tax authority of the state the person is claiming to be a tax resident, which proves that it is a tax resident of that state.
  • If there is a Double Income Taxation Avoidance Treaty (DTT) between Greece and that state in force, the interested natural person should submit, in place of the above certificate, the relevant Double Income Taxation Avoidance Treaty Appliance Petition, which incorporates the tax residence certificate (bilingual forms) or
  1. b)only in the case of not issuance of a tax residence certificate by the competent tax authority of the foreign state, an income tax return clearance copy that the natural person has submitted to the other state suffices or,
  2. c)in the absence of a clearance, a relevant income tax return copy or
  3. d)If none of the above mentioned documents can be provided, because the competent foreign tax authorities do not proven issue such certificates, then a certificate issued by any other public or municipal or recognized authorities is required, which proves the permanent and stable residence of the individual in the other country.

The authenticity of the documents described above must be certified, in accordance to the Hague Convection (Apostille) provisions. An official translation of the documents in the Greek language is also required.

Such authentication and translation requirements are not required for the DTT forms nor for the tax residence certificates issued by the tax authorities of the USA and Turkey on the basis of the DTT signed with our country.

  1. The Tax Office is obliged to respond within two (2) months from the submission date of all the documents described above.

If the documentation provided on time by the interested natural person is considered to be sufficient and the tax residence transfer petition is approved, the natural person is considered as a foreign tax resident and the above mentioned Tax forms (M0-M1-M7), the Solemn declaration in writing for the appointment of a tax representative and the relevant approval are forwarded to the competent Department of the Tax Office, in order for the relevant changes to be registered. The tax representative is accordingly notified.

Consequently, the natural person, whose tax residence transfer petition has been approved, is therefore considered by the Greek tax authorities as a foreign tax resident and subject to Greek income taxation only for the income acquiring in Greece.

In contrast, the natural person, which provided insufficient documentation or his/her tax residence transfer petition has been rejected by the competent tax authority, is subject to Greek income taxation for his/her global income as tax resident of Greece. In this case the taxpayer has the right, exercising the relevant legal procedures (ενδικοφανής προσφυγή), to doubt the above decision/judgment of the tax authority and requests the latter to reconsider its decision.