E1 tax submission - prove you're married??

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Kilkis
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Re: E1 tax submission - prove you're married??

Postby Kilkis » Sun Aug 06, 2017 1:16 pm

But the law before 2011 used the term "domicile" to determine if you should pay tax:

    Furthermore, any individual, regardless of his nationality, is liable to tax in respect of his income from sources situated abroad, if his domicile is in Greece.

They are then using "residence" to determine "domicile" but that is contrary to UK law and I suspect also international law. Place of residence is one factor that can contribute to determining domicile but it is not the only factor.

    The Civil Code provides the following a) a person’s domicile is his main and permanent abode b) no one is permitted to have more than one domiciles at the same time (article 51), c) the domicile is maintained until a new one is acquired d) if a person’s last domicile cannot be determined, his place of residence will be considered as his domicile (article 53)

As far as UK law is concerned "domicile" is where you belong. I was born in the UK, I lived most of my life in the UK and I am a UK citizen. As far as UK law is concerned, I am resident in Greece but I am domiciled in the UK. Under UK law, to change your domicile you must actively give up your existing domicile, something which I have not done. I suspect neither has anybody else currently living in Greece. Sub paragraph b) makes it clear that you cannot have more than one domicile and sub paragraph c) makes it clear that you maintain your existing domicile until a new one is acquired. So I cannot simultaneously be domiciled in the UK and in Greece and, since I have not given up my UK domicile I maintain it. The 2011 law changed the code to make it depend on residence not domicile.

Warwick

GlennB
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Re: E1 tax submission - prove you're married??

Postby GlennB » Sun Aug 06, 2017 2:18 pm

Kilkis wrote:
As far as UK law is concerned "domicile" is where you belong. I was born in the UK, I lived most of my life in the UK and I am a UK citizen. As far as UK law is concerned, I am resident in Greece but I am domiciled in the UK. Under UK law, to change your domicile you must actively give up your existing domicile, something which I have not done.


From wiki (other sites, including legal ones, agree):

"In law, domicile is the status or attribution of being a lawful permanent resident in a particular jurisdiction. A person can remain domiciled in a jurisdiction even after he has left it, if he has maintained sufficient links with that jurisdiction or has not displayed an intention to leave permanently (i.e. if that person has moved to a different state but has not yet formed an intention to remain there indefinitely)."

(my bolding)

In short, it isn't just a matter of your personal attitude as there are tests that can be applied. In our case we left entirely and sold our old home. We can't 'decide' to remain domiciled in the UK just as a taxation convenience.

Kilkis
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Re: E1 tax submission - prove you're married??

Postby Kilkis » Sun Aug 06, 2017 3:49 pm

GlennB wrote:...(i.e. if that person has moved to a different state but has not yet formed an intention to remain there indefinitely)...


I agree there are a lot of considerations but who, other than you, can determine if you have or have not "formed an intention to remain there indefinitely". If you state that you have not formed an intention to stay there indefinitely how can anyone prove that you have? Throughout my life I have lived where I chose to live until I chose to live somewhere else. I will continue to live in Greece until I decide not to live in Greece anymore, assuming that I am not kicked out.

For me personally it doesn't matter, I am tax resident anyway, but I think that anybody from the UK could justifiably claim that they are still domiciled in the UK. Under the old law that would mean someone with no income here did not need to be tax resident in Greece. You cannot have an international system that defines domicile as more complex than simply being resident and Greece stay, "Stuff that. As far as we are concerned if you live here you are domiciled here." What Greece does have the right to do is define residency as the condition for paying tax rather than domicile, which is what they did when they introduced the 183 day rule in 2011.

Warwick

Dinksy
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Re: E1 tax submission - prove you're married??

Postby Dinksy » Sun Aug 06, 2017 4:29 pm

Sorry GlennB but Kilkis is correct in what he has written as we have also checked with our accountant and he confirms we legally can be residents here and still be taxed in the UK. We can be here legally for health or extended tourist reasons and that is what we are happy to do. Should have got a better accountant from the beginning.
Never mind the quality, feel the width.

GlennB
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Re: E1 tax submission - prove you're married??

Postby GlennB » Sun Aug 06, 2017 5:06 pm

Dinksy wrote:Sorry GlennB but Kilkis is correct in what he has written as we have also checked with our accountant and he confirms we legally can be residents here and still be taxed in the UK. We can be here legally for health or extended tourist reasons and that is what we are happy to do. Should have got a better accountant from the beginning.


I don't disagree with the bolded bit. But it doesn't stop Greece requiring a full E1 from you (not just a 'zero return'), and it doesn't stop Greece from demanding tax if the Greek tax on your UK earnings would be higher than the UK tax. An example:

You're full-time resident in Greece but make money in the UK (pensions, rentals, dividends, whatever). The UK taxes you (say) £2,000 on those earnings. If the Greek tax would have been (the € equivalent of) £3,000 then they can demand £1,000. The "double taxation" laws don't make your UK earnings immune from Greek tax, it's just that you get credit for tax already paid.

bobscott
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Re: E1 tax submission - prove you're married??

Postby bobscott » Sun Aug 06, 2017 8:29 pm

GlennB wrote:
Dinksy wrote:Sorry GlennB but Kilkis is correct in what he has written as we have also checked with our accountant and he confirms we legally can be residents here and still be taxed in the UK. We can be here legally for health or extended tourist reasons and that is what we are happy to do. Should have got a better accountant from the beginning.


I don't disagree with the bolded bit. But it doesn't stop Greece requiring a full E1 from you (not just a 'zero return'), and it doesn't stop Greece from demanding tax if the Greek tax on your UK earnings would be higher than the UK tax. An example:

You're full-time resident in Greece but make money in the UK (pensions, rentals, dividends, whatever). The UK taxes you (say) £2,000 on those earnings. If the Greek tax would have been (the € equivalent of) £3,000 then they can demand £1,000. The "double taxation" laws don't make your UK earnings immune from Greek tax, it's just that you get credit for tax already paid.


Not disputing your interpretation of the DTA except to say that an annexe to it does describe those pensions which must and can only be taxed in the country of origin (usually covered by the umbrella term 'Government pensions'). Beware though - this really does mean a pension paid to you because you worked for the government and does not cover the government-paid state retirement pension. That's a different kettle of fish altogether. Bob.
Yesterday today was tomorrow. Don't dilly dally!

Kilkis
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Re: E1 tax submission - prove you're married??

Postby Kilkis » Mon Aug 07, 2017 12:26 am

While the marginal taxation you describe is theoretically possible I believe that it only applies if it is specified in the Double Taxation Agreement. In the specific case of the UK-Greek DTA no such provision is included. The UK-Greek DTA is explicitly worded in terms of income in a territory being "exempt" from tax in one or other territory depending on the type of income, where it arises and where the person is resident. I can see nothing in the DTA that allows Greece to charge excess tax and I do not know personally of anybody who is paying it.

Typically you are classed as tax resident in one country and your income is then assessed for tax in accordance with the appropriate Article of the DTA. You obtain a signed DTA form from the country where tax is assessed and you submit that to the other country. You are then exempt from tax in that other country. For example I am tax resident in Greece and I have income arising in the UK that, under Article X of the DTA, is liable for tax in Greece. If I wasn't tax resident in Greece that income would be liable for tax in the UK. I declare that income on my E1 and I get a DTA form signed by the Greek tax authority. I submit that form to HMRC and HMRC then place an NT tax code on that income. I have a friend who is also tax resident in Greece who has an income in the UK that, under Article VIII of the DTA, remains taxable in the UK. Tax is deducted in the normal way in the UK. They declare the income as non-taxable on their E1 form and get a DTA form from HMRC to submit to the Greek tax authority as proof that it is being taxed there. Neither of us pays any marginal tax based on different rates of tax.

Warwick

PS As an aside there is considerable confusion as to what falls under Article VIII and what falls under Article X. It is common for people to be treated completely differently depending on what their accountant think should apply.

PPS As another aside the DTA does not cover all types of income. Paragraph 2) of Article I states that:

    (2) The present Convention shall also apply to any other taxes of a substantially similar character imposed in Greece or the United Kingdom subsequently to the date of signature of the Convention.

That also leaves plenty of scope for interpretation especially where there is a source of income in one country that does not exist at all in the other. For example winnings from Premium bonds are not taxable in the UK and no such product exists in Greece. Interest on government bonds is not taxable in Greece so, since NS&I is effectively the UK government my accountant is treating Premium bond winnings and interest on other UK bonds issued by NS&I as not taxable in Greece.

GlennB
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Re: E1 tax submission - prove you're married??

Postby GlennB » Mon Aug 07, 2017 10:05 am

Kilkis wrote:While the marginal taxation you describe is theoretically possible I believe that it only applies if it is specified in the Double Taxation Agreement. In the specific case of the UK-Greek DTA no such provision is included. The UK-Greek DTA is explicitly worded in terms of income in a territory being "exempt" from tax in one or other territory depending on the type of income, where it arises and where the person is resident. I can see nothing in the DTA that allows Greece to charge excess tax and I do not know personally of anybody who is paying it.


Article XIV (3) states:

" (3) Subject to the provisions of the law of Greece regarding the allowance
as a credit against Greek tax of tax pay able in a territory outside Greece,
United Kingdom tax payable, whether directly or by deduction, in respect of
income from sources in the United Kingdom shall be allowed as a credit
against any Greek tax payable in respect of that income
.

My bolding. That looks explicit to me and has been the source of my understanding of the whole business, for what little that's worth.

Kilkis
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Re: E1 tax submission - prove you're married??

Postby Kilkis » Mon Aug 07, 2017 10:26 am

But Article XIV (1) states:

    (1) The laws of the Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs of this Article.

For the incomes I am talking about express provision to the contrary is made in the present Convention. For example in Articles VIII and X covering different types of pension it explicitly states that the pension should be subject to tax in one jurisdiction and exempt from tax in the other. Article XIV (3) cannot override that express provision.

Warwick

GlennB
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Re: E1 tax submission - prove you're married??

Postby GlennB » Mon Aug 07, 2017 1:59 pm

Kilkis wrote:But Article XIV (1) states:

    (1) The laws of the Contracting Parties shall continue to govern the taxation of income arising in either of the territories, except where express provision to the contrary is made in the present Convention. Where income is subject to tax in both territories, relief from double taxation shall be given in accordance with the following paragraphs of this Article.

For the incomes I am talking about express provision to the contrary is made in the present Convention. For example in Articles VIII and X covering different types of pension it explicitly states that the pension should be subject to tax in one jurisdiction and exempt from tax in the other. Article XIV (3) cannot override that express provision.

Warwick


VIII relates to pensions gained in the services of government, which doesn't apply in our household.

X doesn't allow you to choose where other pensions are taxed, in fact X (2) explicitly states that, as residents of Greece, our UK pensions must be taxed here, which is exactly what happens though the amount is very small (it would be zero in the UK, which is why we don't even bother to claim exemption).

Meanwhile, neither has anything to do with non-pension earnings and doesn't negate my original point - paying tax in the UK doesn't create an exemption for Greek taxes on those same earnings. Greece is obliged to credit the person to the tune of taxes paid in the UK but can charge tax on the balance calculated on the Greek taxation rates.

All of which cost a local Brit friend 'C' (sadly now deceased) a massive sum. C had been advised that the "double taxation treaty" meant that the tax he paid in the UK was the end of the matter, and he imported shedloads of money from his considerable UK business and rental incomes. He eventually got audited and hit with a 5-figure bill when it turned out that his accountant's advice had been wrong all along.

None of which explains why we suddenly have to prove we're married, though I've learned the meaning of "apostille stamp". Seems we need about 3 of them :o

paul g
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Re: E1 tax submission - prove you're married??

Postby paul g » Mon Aug 07, 2017 5:27 pm

I think the detail of this thread might be of great interest to the Greek taxman, and therefore scrubbed and carried on via PMs.

Al
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Re: E1 tax submission - prove you're married??

Postby Al » Thu Aug 17, 2017 3:55 pm

I agree. And, for the record, my wife and I sold up in the UK eleven years ago and built a house here to live in permanently. Our accountant insists that under current agreements we can be "tax resident" in the UK unde the clause cited by Warwick above. Moreover almost all of our income is public sector pensions, one of which is a non taxable "benefit" awarded in compensation for industrial injury. None of these are taxable outside the UK. The state pension we both recieve is technically taxable in Greece, but no one has suggested it should be. So although we are permanently resident here, we are tax resident in the UK, a status which HMRC does not find unusual for those in our position. In fact I know of no UK pensioners (a sizeable group) here who are taxed in Greece. Perhaps the trick is to find a very good accountant and pay him the usual retainer? Oh and ours has mentioned nothing about proof of marriage. Perhaps thats only for Greek taxpayers?

Kilkis
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Re: E1 tax submission - prove you're married??

Postby Kilkis » Thu Aug 17, 2017 4:40 pm

There is no reason at all why somebody couldn't be registered as tax resident in Greece and receive pensions in the UK that remain taxable in the UK under the terms of the DTA. They would declare them on their E1 tax return as "not taxable in Greece". They would probably need to get a DTA form from HMRC proving that those pensions were being assessed for tax in the UK. There is an official list defining which pensions class as Government and which as Non-Government. Anything that says "Government Note 3" is Non-Government for the purposes of the Greek DTA. I know people with pensions on this list that are being treated as "Government" when the list defines them as Non-Government" because someone at HMRC told them it was so. If HMRC staff haven't read the list I would be astounded if anybody in the Greek tax authority had.

As far as I can see about half the accountants here claim that the UK State Pension remains taxable in the UK, half say it should be assessed for tax in Greece, half don't know and the other half say it has just changed from taxable in Greece to taxable in the UK. Too many halves? We are talking about Greek accountancy.

Warwick

bobscott
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Re: E1 tax submission - prove you're married??

Postby bobscott » Thu Aug 17, 2017 5:14 pm

Kilkis wrote:As far as I can see about half the accountants here claim that the UK State Pension remains taxable in the UK, half say it should be assessed for tax in Greece, half don't know and the other half say it has just changed from taxable in Greece to taxable in the UK. Too many halves? We are talking about Greek accountancy.

Warwick

Like it! Bob
Yesterday today was tomorrow. Don't dilly dally!

GlennB
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Re: E1 tax submission - prove you're married??

Postby GlennB » Sat Aug 26, 2017 2:53 pm

An update, just for laughs:

A local tax official took a look at our marriage certificate, and the translation, and concluded that we are indeed *not* married, as I'm on there as "bachelor" while MrsB is described as "spinster". When we gently pointed out that that was our condition *before* the ceremony it all got very confusing ;)

We retrieved our entire E1 'dossier' and switched accountants. He rapidly spotted that we'd originally been put on taxisnet as 'unmarried' but it was only this year that this stopped people making a married couple's submission. He gave us the number of the top honcho for the district. We told top honcho that there was a mistake on our taxisnet details and, before even asking for our names, let alone AFMs, he informed us that 'there are no mistakes on your records'. So that was productive ;)

The new accountant is trying to sort it. *sigh*


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