Tax Updates: November 9th 2023

Consistent with our commitment to provide updated information on current tax issues

Consistent with our commitment to provide updated information on current tax issues

Circular E.2064/2023 of AADE: Guidelines on tax residency of individuals in Greece

The Independent Authority for Public Revenues (AADE) issued recently a new Circular Ε.2064/2023, which introduces guidelines for the correct and uniform implementation of the provisions that refer to the tax residence of individuals in Greece. By virtue of this new Circular, the definition of tax residence, along with the criteria for acquiring it, are clarified in line with international standards and guidelines, including EU Directives and OECD Clarifying Guidelines on article 4 of the Model Tax Convention (2017 edition).

Specifically, with reference to the criteria introduced in paragraph 1 of article 4 ITC, the terms “permanent residence”, “habitual abode” and “center of vital interests” are explained with more clarity, whilst especially on what concerns the definition of an individual’s “center of vital interests” it is clarified that all personal and economic relations binding the individual with a certain territory should be examined holistically (as a whole), taking also into consideration the actual facts of each particular case (ad hoc).

On what concerns the additional criterion of paragraph 2 of article 4 ITC, which refers to the duration of presence in Greece and which is examined notwithstanding the other criteria of article 4 ITC mentioned above, the new Circular provides clear guidelines on how to calculate the days of presence of the individual in Greece as well as how to determine the year during which the individual should be considered for the first time tax resident of Greece and be obliged to submit an income tax return declaring worldwide income.

Furthermore, the new Circular clarifies certain other issues such as:

  • the alternative remedies that an individual can seek in case he/she is considered tax resident both in Greece and in some other country (dual tax residence issue);
  • the obligation of the tax authorities to provide specifically reasoned justification when they decide that an individual is a tax resident of Greece, given that in principle the tax authorities also bear the burden of proof of the actual facts that support their decision;
  • the procedure for changing tax residence for the year following the year of departure and the procedure and documents required during the previous years in accordance with already existing circulars;
  • the obligation of the taxpayer to keep the documents evidencing that the criteria of article 4 ITC are met, in case of a future tax audit; etc.

Closing, it is worth mentioning that the new circular makes reference to numerous decisions of the Council of State, on which the abovementioned clarifications were based, and provides certain specific examples for the better understanding of such clarifications while implementing the provisions of article 4 ITC.

aneza stavrou
Aneza Stavrou
Director, Tax,
KPMG in Greece