GREECE Law and Practice Contributed by: Fotodotis Malamas, Bernitsas
visions apply to contracts for the purchase of property where the purchaser resides in Greece or intends to do so and falls within one of specific categories of beneficiaries. This tax exemption is granted to an unmarried individual for the purchase of a residence of up to EUR200,000 and a land purchase of up to EUR50,000. The amount of these exemptions may be increased, depending on the individual’s marital status and num - ber of children as well as certain other considerations. The exemption is dependent on the property not being further transferred by the buyer for a period of at least five years. Inheritance and Gift Tax Inheritance and gift tax are charged and regulated by the Property Tax Code, with beneficiaries of the inher - ited or gifted property (heirs, legatees, shareholders and any persons who acquire property through inherit - ance) being classified into three categories. Assets acquired through inheritance or donation are subject to tax at a maximum rate of 10% for first-class relatives (spouse, children or grandchildren), 20% for second-class relatives (parents and siblings, then their children or grandchildren) and 40% in any other case. The law provides for specific exemptions or special tax treatment of specified transactions. 1.2 Exemptions See 1.1 Tax Regimes under Tax on Income Acquired Abroad, Capital income, Transfer tax and Inheritance and Gift Tax, and 2.6 Transfer of Assets: Vehicle and Planning Mechanisms . 1.3 Income Tax Planning See 1.1 Tax Regimes under Tax on Income Acquired Abroad, Capital income, Transfer tax and Inheritance and Gift Tax, and 2.6 Transfer of Assets: Vehicle and Planning Mechanisms . 1.4 Pre-Immigration and Exit Planning Individuals planning to relocate to Greece should carefully plan their exit from their home jurisdiction as tax implications may arise when they exit that jurisdic - tion. Such exit planning should include not only fed -
eral but also state taxes, where applicable. In addition, individuals planning to relocate to Greece should first examine potential tax credits that may apply in Greece for the non-Greek-sourced income which may reduce their tax liability in Greece as well as the tax treatment in Greece of their non-Greek sourced income broadly. As exit tax is not applicable to individuals in Greece (but only to legal persons on entities), no specific tax planning is required for individuals wishing to relo - cate outside Greece. However, following their reloca - tion outside Greece, the individuals may not benefit from potential tax allowances provided to Greek tax residents for their Greek-sourced income. 1.5 Taxation of Real Estate Owned by Non- Residents and Non-Citizens See 1.1 Tax Regimes under Real Estate Taxes. 1.6 Stability of Tax Laws The state of vulnerability that characterises the Greek economy, which is subject to permanent handicaps, makes it more difficult for business activities to devel - op, and in many cases exacerbates their economic difficulties. The current tax framework, especially the suspension of VAT and capital gains tax, encourages individuals and legal entities to invest in real estate. 1.7 Transparency and Increased Global Reporting Greece has introduced a general anti-avoidance clause into its tax system, on the basis of which the tax administration can ignore any “non-genuine” arrangement deemed to be aimed at tax avoidance or tax evasion and leading to a tax benefit for the taxpayer when assessing tax due. An arrangement is considered non-genuine if it lacks “economic or com - mercial essence”. Non-Cooperative Jurisdictions and Tax Consequences The Greek Ministry of Finance issues an annual list of jurisdictions that are deemed to be non-cooperative, and a list of jurisdictions that are deemed to have pref - erential tax regimes. According to the Income Tax Law, countries with a preferential tax regime are those with a statutory cor -
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