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Greek tax residency query

Posted: Sun Aug 12, 2012 10:59 am
by jane clayton
I have just been reading the item on Tax Liability, on the LiC website, for those designated as 'resident in Greece'. Is the collection of 'daily living receipts' still required, and if so does the exception of 'transportation' mean petrol receipts can't be used ?

Posted: Sun Aug 12, 2012 5:20 pm
by footscapes
Collection of receipts by Greek tax residents is still required, at 25% of declared/imputed income. Any shortfall is penalised at 10% of the missing value.

Petrol receipts are acceptable. The "transportation" exception relates to items such as air or ferry tickets.

Press speculation has suggested that the need for receipt collection is to be reviewed as part of the next instance of bureaucratic insanity from the ministry of finance ......oops....... tax bill revision. The new wizard wheeze is that taxpayers may need to submit a full statement of annual income/expenditure and movement on savings, reconciled to a 10% tolerance. Under such a scenario, receipt collection may no longer be necessary. Until any such change in the law, you need to keep all those little bits of paper.

Paul

Greek Tax residency

Posted: Sun Aug 12, 2012 6:20 pm
by Spondall
I am confused totally, moved to Greece in March and have an AFM as I bought a car.

My income from the UK is a government pension so taxed in the UK under the double taxation rules. I do not work in Greece. I transfer money into Greece via Forex into my Greek bank. I had assumed that I file a nil tax return stating these bank transfers as my source of income. Would I still need to collect reciepts?

Steve

Posted: Sun Aug 12, 2012 7:05 pm
by footscapes
You certainly need to submit receipts if you pay tax to the Greek taxman. I don't know if you also need to submit them if tax resident in Greece, but paying tax in the UK under the DTT. Others who post here are probably in the same position as you and perhaps can advise on how they have been affected.

Tax Oasis (Atsalakis & Partners) states: According a new law, that has been voted on 31/03/2011 the physical presence of an individual more than 183 days per year in Greece is automatically classified as tax resident in Greece and is liable to taxed for the worldwide income in the Greek tax office. International tax agreements are applied for avoiding the double taxation. So for a person that is tax resident in Greece the cost of living and the imputed income are applied. Also he is liable to collect receipts of his daily expenses.

Paul

Posted: Sun Aug 12, 2012 8:05 pm
by filippos
George Atsalakis has been dealing with our tax affairs for 10+ years. Last time we spoke, admittedly some months ago, he told me to keep receipts "to be on the safe side," but thought it possible that non-working/earning pensioners would not be affected because "the government can't decide what to do about foreign pensioners".

He promised to inform me as soon as the law had been clarified. I've had a few e-mail exchanges with him since then but he's mentioned nothing about the law being clarified with regard to foreign pensioners. Now, we have an old biscuit tin overflowing with receipts.

When George tells us what to do, we'll do it.

Re: Greek Tax residency

Posted: Sun Aug 12, 2012 9:41 pm
by Kilkis
Spondall wrote:...I had assumed that I file a nil tax return stating these bank transfers as my source of income...


If the 183 day rule stands for foreign pensioners with no income in Greece, which is not clear as stated in other posts, then you would become tax resident in Greece. You would NOT then fill in a "NIL return".

If you are judged to be tax resident then you must fill in your world wide income. There is a section on the tax return to fill in government pensions which remain taxed in the country where the pension originates under the Double Taxation Agreement. You still declare them and, of course, income such as interest from savings in offshore or UK onshore accounts or dividends from shares.

Warwick

Posted: Mon Aug 13, 2012 8:58 am
by bobscott
filippos wrote:
When George tells us what to do, we'll do it.


.......... and when George tells you, hopefully you will pass on the message Phil!!

Posted: Mon Aug 13, 2012 7:20 pm
by filippos
Of course, Bob, with the proviso that what he tells me to do is publishable on a family forum.

Posted: Tue Aug 14, 2012 10:30 am
by Mixos
Greetings All. As a new member of this excellent website I am hoping some of you wise owls out there can help me with this one. We own a house on Crete but are not resident for tax purposes, ie we spend fewer than 183 days a year on the island. My accountant says that under new rules (which appear to be changing all the time) property owners who are not tax residents have to transfer a sum of money electronically - bank to bank so there's a pink/white slip to prove it - every year. And he cheerfully informed me I could, of course, withdraw the whole lot the next day! But he can't tell me how much I should transfer. One day it was "about 3200 euros..." the next week he thought it might be "about 6000." I understand the figure is based on the square meterage of the property, but nobody seems to know the formula to enable me to work out how much I must transfer this year. TaxOasis couldn't, or wouldn't, help as I'm not a client of theirs, and so far there's been a deafening silence to my query from the Economic Section of the Greek Embassy in London. Anyone got any ideas? :?:

Posted: Tue Aug 14, 2012 1:03 pm
by Kilkis
There isn't a "formula" as such. It depends on a lot of factors, e.g. is the house detached, has it got a store room and if so how big, has it got a swimming pool and if so how big, do you own a car or a boat or a plane etc?

If you look at the Tax Oasis web site you will find a document that gives all the necessary information to do the calculation yourself. It's a long document so you are just going to have to plough through it to find the relevant bits.

Warwick

Posted: Tue Aug 14, 2012 2:08 pm
by Mixos
Thanks for taking the trouble to respond Warwick. I had already done a thorough read-through of the TaxOasis document but unless I'm missing something it only applies to people who are (a) resident in Greece for tax purposes, or (b) are non-resident but earn some income in Greece. I don't fit into either category. I am a non- tax resident with no Greek income, no car, no boat etc and in several places in the TaxOasis document it says "the imputed income does not apply to people who spend less than 183 days a year in Greece and have no Greek income." Therefore the various tables in the document are not relevant to my situation. I can only assume that something is getting lost in translation between me and my accountant and perhaps he means I have to transfer the minimum amount under Greek tax thresholds (5000 euros?) to "prove" I can afford to run a property. Maybe I'll try that and see what happens but if, in the mean time, anyone can come up with the definitive answer I'd be glad to read it!

Posted: Tue Aug 14, 2012 3:58 pm
by footscapes
Mixos

I think that there is considerable confusion about the application of imputed income/funds transfers arising from a recent court decision that the concept of taxing non - residents based on imputed means was illegal/unconstitutional. It therefore rendered it unclear whether the requirement to transfer funds based on imputed costs calculation was also wrong. This confusion probably also exists within Greek tax offices. This link gives some background http://www.kperrou-ontax.com/1/post/2011/05/non-residents-assumptions-for-the-acquisition-of-income-in-greece-abolished-as-from-1-1-2011.html (And the judgement itself is a hoot, expressed in the article as "The courts have ruled that the use of assumptions for the determination of the income of an individual is lawful, as long as the assumptions do not result in creating fictitious income for the individual but they are used in order to reveal existing income that is not declared by the taxpayer."). Kafka is alive and well and living in Greece.

Prior to this, cash transfer necessary to demonstrate outside (of Greece) income sources was required, and based on the imputed income asset table. If you look at this link (from Atsalakis, but dated earlier than the Tax Oasis write up), it clearly states so (towards the bottom) http://www.apokoronasourhome.com/pdfs/Tax_liabilities.pdf

If you have sufficient funds, perhaps the safest option would be to make a transfer based on the imputed income calculation. Note that the values increased substantially last year, so you would need to use the current Atsalakis table at http://www.cretanaccountant.gr/tax-liabilities-in-greece-for-non-greek-citizens/

The only thing certain at the moment is that confusion reigns within the Greek tax system regarding residents/non - residents/183 day rule/pensioners/funds transfers/proof of income.

Paul

Posted: Tue Aug 14, 2012 4:26 pm
by bobscott
filippos wrote:Of course, Bob, with the proviso that what he tells me to do is publishable on a family forum.


Oh go on Phil - lots of asterisks and thing will do!!

Posted: Tue Aug 14, 2012 5:14 pm
by Kilkis
This is a direct quote from the link quoted by footscapes http://www.cretanaccountant.gr/tax-liab ... -citizens/

"The imputed income is not applied to individuals that spend less than 183 days in Greece with the precondition that they don’t earn any income in Greece."

Clearly your accountant disagrees with this interpretation of the law. I think you can safely assume that there is NO "definitive answer" as with most questions in Greece.

Warwick

Posted: Tue Aug 14, 2012 6:00 pm
by Tim
Hi Mixos

If it's any help, I'm in the same position as you are; however on my last trip to the island my accountant assured me that the 'pink slip/fund transfer' for non tax-residents has been abolished.

This thread may help:
http://www.livingincrete.net/board/viewtopic.php?t=5895

Although it's easy enough (and free) to transfer money and you can, indeed, draw it out the next day - unless you're going to keep it in Euros it's damned expensive to change it back into sterling ... then you have to do it all again the following year. Good riddance to it I say!

Tim