More time to complete the necessary procedures is available to pensioners from abroad who want to transfer their tax residence to Greece, making use of the special tax regime with a 7% rate for the income they earn abroad.
The revised more favorable framework decided by the Tax Administration provides for the transfer of the application submission deadline from 31 March to 31 October, giving interested parties seven additional months to complete the process, while all the other dates for the submission of supporting documents, the examination of applications and inclusion in the regime are also clarified.
According to the main changes:
The new final deadline for submitting the application for inclusion under article 5B of the Income Tax Code is 31 October. Those who have transferred their tax residence to Greece up to and including 2 July may request their inclusion either for the same year or for the following year. Those who transfer their tax residence after 2 July may be included only from the following year.
The application may be submitted even without the complete file so that the deadline is not missed, while the required supporting documents may be submitted until 30 November of the tax year for which inclusion is requested.
The examination of applications for inclusion in the alternative taxation regime is carried out by the competent Tax Procedures and Service Center (KEFODE), based on the taxpayer's address.
More specifically, KEFODE Attica is competent for taxpayers with an address in the Region of Attica and on the islands of Kea, Kythnos, Andros and Milos, while KEFODE Thessaloniki is competent for the rest of the Territory. The competent KEFODE examines the application within 60 days and, in any case, must have issued a decision no later than the last working day of December.
The conditions
For inclusion in the special regime, the following conditions are required:
- The interested person must not have been a tax resident of Greece for five of the previous six years, and:
- They must transfer their tax residence from a country with which Greece has an administrative cooperation agreement on tax matters.
At the same time, it must be proven that they are a beneficiary of a pension from abroad.
If the relevant information already exists in the records of the Independent Authority for Public Revenue (AADE), no additional supporting documents are required for tax residence. Otherwise, tax residence certificates, tax returns or other official documents from the country of origin are requested.
The tax
Upon submission of the annual income tax return, a single administrative tax assessment act is issued for the individual (both for domestic and foreign income).
More specifically, the tax on income arising abroad (article 5B of the ITC):
- Is calculated with a fixed rate of 7% (unless a tax exemption or different taxation is provided for by the provisions of the DTTs or other international treaties).
- Is paid in a lump sum every year by the last working day of December.
- Upon its payment, every tax obligation for the income earned abroad is exhausted.
- The tax cannot be offset against other tax obligations or credit balances, nor can it be included in an installment arrangement.
- Any tax already paid abroad may, under conditions, be deducted from the tax due in Greece up to the corresponding amount. Income earned in Greece is taxed under the general provisions.
If the tax is not paid by the end of December, the taxpayer ceases to be subject to the special regime and is thereafter taxed under the general provisions on their worldwide income.
Submission of applications
Interested parties may submit the application and the necessary supporting documents in the following ways:
- Digitally: through the myAADE digital portal (myaade.gov.gr), in the application My Requests > New Request > Taxation > Alternative Income Taxation > Inclusion in alternative taxation of income of natural persons, beneficiaries of income from pensions arising abroad, who transfer their tax residence to Greece – article 5B ITC.
- By post: with a physical file, by registered letter or courier service, to the competent, based on the taxpayer's address, KEFODE Attica or Thessaloniki. In person: at the competent KEFODE Attica or Thessaloniki, following a scheduled appointment through the My Appointments application on the myAADE digital portal.
In addition, interested parties may visit the myPoint Attica offices, the Tax Service Offices and the local DOY offices and submit their application with the assistance of AADE employees.
Applications and approvals
It is worth noting that to date more than 1,700 applications have been submitted, of which approximately 1,000 have been approved, with the interested parties coming mainly from countries of Northern and Western Europe (such as the United Kingdom, Germany, France, the Netherlands and Scandinavian countries), while increased interest is being recorded from American pensioners.