GREECE Law and Practice Contributed by: Fotodotis Malamas, Bernitsas Law
Pensioners The third initiative pertains to pensioners who wish to relocate permanently to Greece. Pursuant to the new provisions, non-Greek pensioners who decide to transfer their tax residence to Greece will be subject to a 7% flat tax for income not generated in Greece. Those eligible for this tax incentive regime are pen - sioners who: • were not Greek tax residents for the previous five out of six years; and • have their tax residence in a jurisdiction with which Greece has signed an administrative co-operation agreement. The tax incentive regime for pensioners does not exclude the application of the favourable provisions of double tax treaties (DTTs). Pensioners must file the relevant application with the competent tax authority no later than March 31st and file supporting documents no later than May 31st of the relevant tax year; these are defined on a case-by- case basis, and the tax authorities must approve or reject the application within 60 days. Taxes on Web Platforms In an attempt to combat tax evasion from residential rentals, the State applies strict tax provisions for rent - als through web platforms such as Airbnb and Trip - ping. By way of Law 5073/2023, the term “short-term” leas - ing has been re-defined to include leases lasting a maximum of 60 days. Previously, the time period for short-term leasing was one year. The 60 days’ period applies to each lease and there are no restrictions on the number of leases permitted throughout the tax year. Moreover, new criteria are introduced for the classification of income derived from short-term leases. Income derived from short-term leases by legal enti - ties and persons and of three or more properties for individuals is classified as income arising from busi - ness activities.
Income earned by individuals from short-term leases of up to two properties is classified as income from immovable property. However, if additional services beyond bed linen are provided, the income is classi - fied as income from business activities. Income from immovable property is taxed in accord - ance with a progressive scale from 15% up to a maxi - mum of 45%. Income from business activities earned by individuals is taxed in accordance with a progres - sive scale from 9% up to a maximum of 44% and by legal persons at a flat rate of 22%. Lease payments from short-term leases classified as business activi - ties are subject to VAT at a reduced rate of 13%. Taxpayers failing to register their properties with the “Short-Term Real Estate Stay Registry” may face a penalty equal to 50% of the gross income of the respective tax year with a minimum amount of EUR5,000, which is doubled in the case of repetition of the infringement. Moreover, short-term leases are subject to stayover municipality tax at the rate of 0.5% of the nightly rental and to climate crisis resilience charge, which varies depending on the time period and accommo - dation type. From March to October the charge is EUR1.5 and from November to February EUR0.5. For hotels, the charge ranges from EUR1.5 up to EUR10 between March and October, and from EUR0.5 to EUR4 between November and February, and for detached houses EUR10 and EUR4 respectively. This new charge replaces the accommodation tax imposed on hotels. In principle, legal entities and persons are subject to income tax at 22%, and any dividends they distribute are subject to further taxation at 5% at the level of the shareholder. Real Estate Taxes The imposition of various taxes on real estate acts as a disincentive to investment in immovable property. The main taxes applicable to real estate can be sum - marised as follows. Unified Real Estate Tax (URET) is levied annually on property located in Greece and the tax is calculated
197 CHAMBERS.COM
Powered by FlippingBook