How Bad Is The Greek Tax System?

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Rick
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Re: How Bad Is The Greek Tax System?

Postby Rick » Wed Jul 01, 2020 2:55 pm

The linked article hints that it It may become more advantageous to be ‘tax resident’ in Greece. The proposal is a rate of 7% for private income/pension, but that public pensions would continue be taxed at source under Double taxation agreements.

https://greece.greekreporter.com/2020/0 ... of-europe/

“The Greek government is drafting a bill that would create a favorable tax regime for foreign pensioners who decide to settle in Greece. According to the measures being drafted, Greece will provide a single tax rate of 7 percent in an effort to attract this category of foreign citizens to the country.”

Midlander
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Re: How Bad Is The Greek Tax System?

Postby Midlander » Sun Jul 12, 2020 9:55 pm

Today in Ekathimerini more details about 7% income tax rate for attracting retirees.

ekathimerini.com/254660/article/ekathimerini/buisness

Kilkis
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Re: How Bad Is The Greek Tax System?

Postby Kilkis » Sun Jul 12, 2020 11:45 pm

Oh, wonderful. So UK ex-pats who have avoided paying Greek tax for all the years they have lived here will be rewarded with a 7 % tax rate if they become tax resident. Those of us who have diligently paid their tax to the Greek government, in my case for 23 years, will continue to pay the normal Greek tax rate. That really makes my day. Well done Mitsotakis.

Warwick

bobscott
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Re: How Bad Is The Greek Tax System?

Postby bobscott » Mon Jul 13, 2020 8:35 am

Kilkis wrote:Oh, wonderful. So UK ex-pats who have avoided paying Greek tax for all the years they have lived here will be rewarded with a 7 % tax rate if they become tax resident. Those of us who have diligently paid their tax to the Greek government, in my case for 23 years, will continue to pay the normal Greek tax rate. That really makes my day. Well done Mitsotakis.

Warwick


Bad news for you Warwick. Perhaps your accountant can find a way to get you included in the new scheme? Most accountants seem to be very versatile when it comes to things like that! Fingers crossed. Bob.
Yesterday today was tomorrow. Don't dilly dally!

Kamisiana
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Re: How Bad Is The Greek Tax System?

Postby Kamisiana » Mon Jul 13, 2020 9:39 am

Kilkis wrote:Oh, wonderful. So UK ex-pats who have avoided paying Greek tax for all the years they have lived here will be rewarded with a 7 % tax rate if they become tax resident. Those of us who have diligently paid their tax to the Greek government, in my case for 23 years, will continue to pay the normal Greek tax rate. That really makes my day. Well done Mitsotakis.

Warwick

Where are the forum VULTURES from the "Any rebates available" section picking over the carcass of Jackdaw, When there are Greeks with their head in their hands crying and don't have a single euro or food to feed their family and some then complain they have had to pay tax :roll:

Kilkis
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Re: How Bad Is The Greek Tax System?

Postby Kilkis » Mon Jul 13, 2020 10:07 am

I'm not that bothered about me not getting the 7 % rate, Bob. Obviously paying less tax would be nice but I can afford what I am paying now so I don't need a reduction. I wouldn't ask my accountant to try to finagle me onto the new scheme.

We pay taxes to provide the services that we all use. I've always maintained that people should pay taxes where they use the services, or use them the most if they live in two places. If your house was burning down you would phone the Greek fire brigade not a UK one. If you were attacked or robbed you would phone the Greek police not dial 999. If you need treatment you go to a Greek hospital not a UK one etc.

My attitude is very simple. If you want to live in Greece pay your taxes in Greece. If you want to pay your taxes in the UK then live in the UK. I realise that for many people they are just acting on the advice of their accountant and their accountant is acting to minimise their tax liability but you could say the same about Ken Dodd, Jimmy Carr, Philip Green, Amazon etc.

It is the principle that people who do not follow the rules should be bribed to try to get them to obey the rules that I object to. There may well be some people who are genuinely not liable to be tax resident in Greece. Offering them a bribe to tempt them to voluntarily become tax resident in Greece is fine. That raises revenue that the government would otherwise have no access to. Paying the same bribe to people who are liable to be tax resident in Greece but have avoided doing so is not fine.

Warwick

PS Nobody likes paying tax, Kamisiana, but I have never complained about paying it. I have paid my taxes in full and on time for 56 years. I declare all my income. I pay my tax where I live and make use of the services taxes pay for.

ros21m
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Re: How Bad Is The Greek Tax System?

Postby ros21m » Mon Jul 13, 2020 6:09 pm

From the article. it reads as though it will apply to pensioners, moving to Greece in the future, not to those already living here. Being tax resident in Greece, it doesn't affect me.

Kilkis
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Re: How Bad Is The Greek Tax System?

Postby Kilkis » Tue Aug 04, 2020 3:59 pm

The new law. No. 4714/2020, to provide a 7 % flat rate of tax to pensioners who transfer their tax residency to Greece was passed by Parliament on Friday. It's aim is to attract new pensioners to come and live in Greece so anybody who has already been living here for some time, but has managed to stay non-resident for tax purposes, should probably discuss the matter with their accountants. I am not sure if applying to transfer tax residency now could cause problems.

Warwick

peebee
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Re: How Bad Is The Greek Tax System?

Postby peebee » Wed Aug 05, 2020 8:00 am

ros21m wrote:From the article. it reads as though it will apply to pensioners, moving to Greece in the future, not to those already living here. Being tax resident in Greece, it doesn't affect me.

If your income is £12,500 or less, you would pay nothing as a UK tax resident, but under the 7% Greek `offer' you would pay £875.
The break even figure is around £19,000, under that, the UK system wins, above that the Greek offer is more beneficial.
Something you have to bear in mind are the conditions, `As soon as a foreign pensioner’s application is approved, the sum of their income obtained abroad will be taxed at a flat rate of just 7% for the next 10 years', so in year 11 you could see your income plummet.

Kilkis
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Re: How Bad Is The Greek Tax System?

Postby Kilkis » Wed Aug 05, 2020 8:55 am

peebee wrote:...If your income is £12,500 or less, you would pay nothing as a UK tax resident, but under the 7% Greek `offer' you would pay £875.
The break even figure is around £19,000, under that, the UK system wins, above that the Greek offer is more beneficial...


It is always true, when comparing two tax systems with different tax codes, that there will often be income bands where one system is more beneficial and bands where the other system will be more beneficial. Note also that the DTA rules apply so, for some people with more than one income stream, some of their income may remain taxable in the UK and benefit from the £12,500 personal allowance and some will become taxable in Greece at 7 %. For them the break even point may be much less than £19,000.

peebee wrote:...`As soon as a foreign pensioner’s application is approved, the sum of their income obtained abroad will be taxed at a flat rate of just 7% for the next 10 years', so in year 11 you could see your income plummet.


According to the information I received from my accountant, which is what prompted me to make the post, the period is 15 years not 10 but you are correct that at some point you would become liable to the full Greek tax code. Again, in some cases, the DTA rules might mean that this is not as bad as some people think.

Warwick

PS This does not affect me at all. I am and always have been tax resident. I posted because I thought it might be of interest to those who are not, especially if they are forced to become tax resident in order to get a Biometric Residence Card. At the moment nobody knows if that will happen but logically it could.

Jeffstclair
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Re: How Bad Is The Greek Tax System?

Postby Jeffstclair » Wed Aug 05, 2020 9:52 am

Yes I just read the email from the accountant ..and it seems it will not affect us at all 'cos we are both already tax residents. ...so no tax reduction ..

bobscott
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Re: How Bad Is The Greek Tax System?

Postby bobscott » Thu Oct 01, 2020 2:13 pm

Yesterday today was tomorrow. Don't dilly dally!

evansmr1
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Re: How Bad Is The Greek Tax System?

Postby evansmr1 » Thu Oct 01, 2020 2:54 pm

Does not sound very promising. 7% on all income? According to the article if my total annual income is £12,000 = 13,080 euros at the current rate of (1.09) = 915 euro tax. whereas in the UK the deductible tax = £0.00.
What rate of transfer will they use?. The rate is currently like a yo yo. No threshold.
Or have I read it incorrectly?.
Mike
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Sic parvis magnaike

Tim
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Re: How Bad Is The Greek Tax System?

Postby Tim » Thu Oct 01, 2020 3:09 pm

I would have thought current Greek tax thresholds would apply to new retirees, it's just the rate that's been slashed to make it attractive?

Tim

Kilkis
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Re: How Bad Is The Greek Tax System?

Postby Kilkis » Tue Oct 06, 2020 4:43 pm

Sorry, Tim, but it is a flat rate tax so there are no zero rate bands/allowances. A quote from my accountant:

    "The individual pays 7% flat tax on his global income, per year."

That means all of it. If your only income is from pensions then the break even point is about £19,230 per annum. In the UK you would get a £12,500 allowance so you would only pay tax on (£19,230 - £12,500) = £6,730 at a rate of 20 % = £1,346. In Greece you would pay 7 % on the full amount = £1,346.10. Below £19,230 it is better to be taxed in the UK while above it would be better to be taxed in Greece. If you have other sources of income such as interest, dividends, capital gains etc the break even point will move a little as these have different tax rates in the UK and also their own allowances.

The above analysis does not take account of the possibility that a UK State Pension might remain taxable in the UK. This is a grey area. Another quote from my accountant:

    "The favourable tax regime is applied to pensioners in the private sector, as public pensioners are usually taxed in their home country. In any case, government sources say, double tax avoidance agreements will be observed.

Note that the favourable rate only applies for 15 years and then you revert to normal Greek tax bands. You also have the risk that a future government could change the rules.

Warwick


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