URGENT - YOUR TAX RETURN

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jet
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Re: URGENT - YOUR TAX RETURN

Postby jet » Mon Jun 01, 2015 2:06 pm

Chaos in the system for tax declarations

Few taxpayers or even accountants have any idea of what is going on with tax declarations this year, as poor handling by the General Secretariat for Public Revenues, confusion in the Finance Ministry – which at the eleventh hour submitted amendments to tax legislation – and numerous mistakes on behalf of social security funds have created a state of complete chaos.

http://www.ekathimerini.com/4dcgi/_w_ar ... 015_550508

Mixos
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Re: URGENT - YOUR TAX RETURN

Postby Mixos » Tue Jun 09, 2015 5:20 pm

As an update to my post of May 29 on page 2 of this thread, I have now received the letter from HMRC. It is a model of clarity. It reads:

Certificate of Fiscal Residence.
To whom it may concern. I certify that (name) of (UK address) from January 1 to December 31 2015 was a resident of the UK in accordance with Article II of the Convention in force between the UK and Greece.

It is signed, dated and stamped by an official at HMRC Personal Tax Office. The code at the bottom of the letter is OCAR46.

Obviously this is only of interest to those of us who are still UK tax resident and have to satisfy the Greek authorities of that fact. I will present it to my accountant for next year's tax return, so let's hope it works and they haven't changed the rules again by then. Just a reminder that you can get this letter by filling in the online form here:

https://online.hmrc.gov.uk/shortforms/form/PT_CertOfRes

SatCure
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Re: URGENT - YOUR TAX RETURN

Postby SatCure » Tue Jun 09, 2015 10:40 pm

Mixos wrote:Obviously this is only of interest to those of us who are still UK tax resident

I pay tax only in the UK, even though I live here on Crete most of the time. So am I a UK tax resident? (My Greek accountant thinks I am.)

Mixos
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Re: URGENT - YOUR TAX RETURN

Postby Mixos » Wed Jun 10, 2015 9:05 am

Well I'd love to know how you manage that, Satcure, as the Greek Ministry of Finance (and my accountant) says that anyone who is resident in Greece for more than 183 days a year is automatically regarded as a Greek tax resident and subject to tax on their worldwide income. If you already pay tax in UK you can claim it back under the double taxation convention. You either have a very clever accountant or he's bending the rules. Can you tell me what paperwork you have to submit to your accountant each year to prove that your tax is paid in the UK? Is it the form from HMRC (in my post) or something else? I'd be very interested to know.

footscapes
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Re: URGENT - YOUR TAX RETURN

Postby footscapes » Wed Jun 10, 2015 11:44 am

There is an overriding clause in the current tax bill that allows foreigners living in Greece to avoid tax residency. Most clued up accountants manage to invoke this and allow their British clients to pay tax in the UK. Satcure uses Atsalakis and we have friends who also use him to file tax returns. Although they live permanently in Crete, they pay tax in the UK quite legally. See http://www.livingincrete.net/tax.html tax residence paragraph.

Paul

bobscott
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Re: URGENT - YOUR TAX RETURN

Postby bobscott » Wed Jun 10, 2015 2:17 pm

Mixos wrote:If you already pay tax in UK you can claim it back under the double taxation convention. .


Not entirely true. Those of us in receipt of a 'Government Pension' (i.e. those who actually worked for the government of the UK in clearly defined circumstances) can only, according to the DTA, have that pension taxed in the country where it arises. See this link to determine whether your pension is a Government one or not:

http://www.hmrc.gov.uk/manuals/intmanual/INTM343040.htm
Yesterday today was tomorrow. Don't dilly dally!

Kilkis
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Re: URGENT - YOUR TAX RETURN

Postby Kilkis » Wed Jun 10, 2015 4:01 pm

footscapes wrote:There is an overriding clause in the current tax bill that allows foreigners living in Greece to avoid tax residency.


I still think the applicability of the get out sentence is a grey area. The clause has two conditions: a) primary residence or habitual abode etc and b) the183 day rule. Either condition makes you tax resident. The get out statement only mentions the 183 day rule and so implies that it is only a get out for that condition. If that interpretation is correct then people who only rent in Crete could probably make use of it, especially if they own property in the UK. Those who own the house where they live probably couldn't, especially if they don't still own in the UK. Just my reading of it. I agree that some accountants are continuing to register clients as UK tax resident even though they live here permanently while others are making clients who live here more than 183 days register as tax resident in Greece. I suspect that the former are not actually doing anything. They are just continuing with the status quo until they are challenged. I could be wrong.

It is perhaps worth noting that, for most people, being tax resident here isn't a huge deal. I've been tax resident for 18 years and the tax I have paid isn't vastly different from what I would have paid in the UK.

Warwick

Mixos
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Re: URGENT - YOUR TAX RETURN

Postby Mixos » Wed Jun 10, 2015 9:10 pm

I think that sums up the (confused) picture very well, Warwick.

Footscapes, my reading of the tax residence paragraph on the LiC website (which I've read and re-read many times) does not, with respect, support your suggestion that we have a choice about where we are tax resident. It seems pretty straightforward to me. Living in Crete full time? You are a tax resident. Living in Crete for under 183 days a year? You are not.

Clearly, though, George Atsalakis appears to have found a way round this and, as I said earlier, I'd love to know how. (Wish he had an office in Sitia!) Specifically, if you are living here but claiming to be NON-tax resident in Greece, what paperwork do you have to submit with your Greek tax return to prove that you pay your tax in the UK? Is it the Statement of Fiscal Residence from HMRC, or some other document? If you or Satcure can tell us, that would be a big help.

filippos
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Re: URGENT - YOUR TAX RETURN

Postby filippos » Wed Jun 10, 2015 11:11 pm

footscapes wrote:The get out statement only mentions the 183 day rule and so implies that it is only a get out for that condition.
I haven't looked at the actual law but on the main LiC site it says, "This paragraph is not applied in case that the individual spends more than 183 days only for tourist or health reasons or other private reasons. The final three words would seem to encompass a few things.

I've been with George Atsalakis for years and last time I asked about this (18 months ago?) he still advised UK tax residency.

footscapes
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Re: URGENT - YOUR TAX RETURN

Postby footscapes » Thu Jun 11, 2015 12:07 am

Hi Mixos

I can't help with specific paperwork for filing here. We lived in Crete for 10 years, ran a business here and were tax resident in Greece during that time, paying taxes to Greece on our Greek business income and on our UK pensions/bank interest. There was no way we could be tax resident outside of Greece as we had income in Crete.

We do know many UK (and other nationality) expats who live here full time, but pay taxes in their country of origin. Some of them have told us that their accountants use the "get out clause" I referred to earlier to accomplish this.

Warwick is correct about it being a grey area, but in Crete (Greece more generally?), in the absence of specific clarification circulars from the MinFin about these grey areas, accountants seem able to push forward their own interpretation of the law and make this stick. I suspect that this is the case here, with Greek accountants and their clients thinking that being tax resident in Greece is a 'bad thing', and to be avoided wherever possible. Clearly, if the law is ever clarified, and the "get out clause" found wanting, there could be interesting consequences.

Paul

Mixos
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Re: URGENT - YOUR TAX RETURN

Postby Mixos » Thu Jun 11, 2015 9:48 am

Thanks Paul, that's very interesting. I assume therefore that George Atsalakis and other accountants must simply write an agreed form of words on your/their tax returns, invoking the "get out clause," and it's accepted by the Ministry of Finance. The bit I still can't grasp is how those accountants prove to the MinFin that their clients (you and others) are paying tax in their home countries, because if the MinFin doesn't have any paperwork verifying that you are paying tax in the UK (P60? copy of UK tax return?), surely their default position would be that you should pay it in Greece? It's this "proof of tax paid in the UK" that has been causing me grief, because my accountant keeps changing his tune about what I must produce each year. At the moment, it seems that HMRC's "Certificate of Fiscal Residence" is working.. but next year? Who knows? I think this will run and run.

Kilkis
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Re: URGENT - YOUR TAX RETURN

Postby Kilkis » Thu Jun 11, 2015 11:05 am

Mixos wrote:Thanks Paul, that's very interesting. I assume therefore that George Atsalakis and other accountants must simply write an agreed form of words on your/their tax returns, invoking the "get out clause,"...


I don't know for sure but I suspect they don't do anything at all. They simply register people as not tax resident in Greece at the start and then do nothing. Unless the Greek tax authority challenges someone there is no problem. I guess if someone has to undergo a full tax audit then they might be faced with a small problem but I doubt if it would be serious. When I re-registered in Crete two senior tax inspectors spent 20 minutes yelling and screaming at each other because one thought I should be resident and the other thought I shouldn't. In the end I decided for them. If they don't know how can you be expected to.

If ever challenged my best guess would be that you argue using the get out sentence. If that fails you argue that the law is ambiguous and you acted in good faith. I don't know the details but there may also be an article of the civil code that pre-dates the 183 day rule in the tax code that allows you to stay non-resident if your income is outside Greece. Worst case scenario probably you would have to change to resident from that point on but no retrospective tax. Possibly a small fine, e.g. €80 reduced to €40 if paid promptly.

I know someone who is tax resident here but has income that remains taxed in the UK. They get the certificate mentioned above and recently have had to also get an apostille stamp on it. That has been accepted so far by Chania tax office.

Warwick

Kilkis
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Re: URGENT - YOUR TAX RETURN

Postby Kilkis » Wed Jun 17, 2015 6:07 pm

I spent a jolly couple of hours in Chania Tax Office this morning. Apparently they suddenly decided they wanted further proof that my wife had died, even though it happened 3 years ago and they have been happily accepting my tax returns for the last two years with only my name on them and also the property tax demand now shows me as 100 % owner when previously we were both shown as 50 %. The queue was not particularly long and there was only a small amount of queue jumping, accompanied by the usual very loud and prolonged exchanges of opinion. The problem was that the Taxisnet system continually crashes. Each operator tries to deal with an enquiry, gets about halfway through and it all falls over. Everybody stands around for twenty minutes until it reboots and we start the process again. The staff were very helpful and friendly and I feel sorry for them having to work in such a chaotic and unstable environment. I certainly couldn't do it. I felt completely exhausted when I got home even though I spent most of the time doing absolutely nothing.

I visited my accountant to put together the relevant paperwork before going to the tax office and we briefly discussed Dual Taxation Agreement forms. It would seem that a lot of Greek citizens have been trying to register themselves tax resident in other countries to avoid paying taxes in Greece. To clamp down on this the Greek government has implemented new rules to make it much more difficult for them to do this and in the process have made it also much more difficult to get DTA forms. It's completely crazy because people like me, who need a form signed by the Greek tax authorities, are doing so because we ARE paying taxes in Greece. Τι να κάνουμε;

Warwick


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