globaltaxnews.ey.comSign up for tax alert emailsForwardPrintDownload |
15 January 2018 Greece updates guidelines on change of tax residency process Greece's Head of the Independent Authority for Public Revenue has issued decision POL 1201/2017 (the Decision), released on 6 December 2017, which provides updated guidelines on the process to be followed when changing an individual's tax residency status. The Decision also introduces for first time the possibility of split tax residency between spouses. Individuals who attempt to change their tax residency status from tax resident to non-tax resident must submit (documents M0, M1 and M7) by the last working day prior to 10 March of the fiscal year following the fiscal year of departure. After having filed the application, the individual must provide all supporting documentation requested prior to the last working day leading up to 10 September in the fiscal year following the fiscal year of the respective departure. Supporting documentation that will be requested includes a tax residence certificate from the country of tax residence of the individual. As an alternative, if the individual has moved to a country which has signed a double tax treaty with Greece, the individual can provide the tax residence certificate according to the template provided by the respective double tax treaty. If no tax residence certificate can be provided, the individual may provide a tax assessment or tax return from the foreign country. If none of the above can be provided, the individual may provide any certificate issued by a public authority of the foreign state (i.e., municipality or other recognized authority) evidencing that the individual has transferred its "center of vital interest" in that foreign country. Additionally the individual will need to submit supporting documentation regarding the departure date from Greece and the relocation date in the foreign state, as evidence that the individual has remained in the foreign state for more than 183 calendar days within the tax year for which they have requested the change of tax residency status. Such documentation could be (indicatively): employment contract or evidence of commencement of business activity in the foreign country, certificate evidencing the registration of the individual with social security authorities in the foreign country, certificate of registration with the Municipality, copy of rental agreement, or certification of school attendance for children. Instead of the above documentation, the taxpayer may also submit tax residence certificates issued by the tax authorities of the foreign state for the previous two years from the year for which the tax residency change is being requested. The concept of split tax residency between a married couple is being introduced for the first time and specifically in the case where one spouse wishes to change his/her tax residency status to nonresident whereas the other one will remain Greek tax resident, he/she should submit the following additional documentation:
Deadline for the respective tax office to respond to the tax residency change application and submission of the application and supporting documentation after 31 December After the filing of the supporting documentation, the tax office must decide within two months regarding the change of tax residency application. Any applications and supporting documentation submitted by 31 December of the year following the departure year, shall be received by the respective tax office with no waiver or penalties. On the contrary, should the applications or the supporting documentation be submitted after 31 December of the year after the departure, these applications should be examined according to the process of POL 1177/2014 however, taking into consideration the supporting documentation included in POL 1201/2017. Once the individual has timely provided the necessary supporting documentation and no later than by the end of the year for which the change of tax residency is being requested, he/she should be considered a foreign tax resident and, provided that he/she is liable to file a Greek income tax return, the tax filing deadline is extended until 31 December of the fiscal year following the fiscal year of departure. If the individual has timely provided the necessary supporting documentation for the change of tax residency but such documentation is not considered complete and sufficient by the local tax office, then the request for change of tax residency will be rejected and the individual is automatically categorized as a Greek tax resident and to file a tax return for worldwide income no later than 31 December of the tax year following the year for which the tax residency request has been submitted, with no waiver on penalties. The same applies if the individual has submitted the documents M0, M1 and M7 without submitting the supporting documentation. If the individual files the application in due time but provides the supporting documentation after the deadline, he/she is required to file a tax return either as a Greek tax resident on worldwide income (if the application was rejected) or as a foreign tax resident (if the application was successful) which (the tax return) will be considered overdue as it is past the filing deadline and a late submission penalty will be imposed. The Decision applies to tax residency applications submitted during 2017 and onwards and relates to change of tax residency status for individuals for the 2016 tax year onwards. Individuals whose applications for tax residency change have been submitted and rejected within 2017, may re-submit the relevant application, provided that they meet the criteria included in the Decision. Document ID: 2018-5127 |
