GREECE Law and Practice Contributed by: John C. Dryllerakis, John Papadakis and Nikos Kalantzis, Dryllerakis Law Firm
primarily indirect-tax measures but have indirect effects on the overall tax burden. 2.2 Tax Residence of Individuals Individuals are deemed tax residents of Greece where they maintain in Greece a permanent or principal resi - dence, a habitual abode, or the centre of their vital interests. The centre of vital interests is determined on the basis of an overall evaluation of the relevant facts and circumstances, including, inter alia, family ties, professional activities, business interests and financial connections. An individual who is physically present in Greece for more than 183 days in aggregate within any twelve- month period is considered a Greek tax resident as from the first day of presence in Greece, subject to an exception for individuals present exclusively for tour - istic, medical, therapeutic, or similar private purposes. In addition, individuals serving abroad as consular, diplomatic, or other public officials of equivalent sta - tus, as well as Greek nationals employed in the public sector and assigned to duties abroad, are considered as Greek tax residents. The above apply subject to the terms of any applica - ble double taxation treaty. 2.3 Taxation of Resident Individuals Individuals who qualify as tax residents of Greece are subject to taxation on their worldwide income, irre - spective of the source from which the income arises. With respect to foreign-source income, Greece pro - vides relief for double taxation. Unilateral relief is gen - erally available in the form of a foreign tax credit for income tax paid abroad, up to the amount of Greek tax attributable to that income. In addition, Greece has an extensive network of double taxation treaties, which may allocate taxing rights between jurisdictions and provide for credit or exemption mechanisms, depending on the treaty provisions. Special tax regimes may apply in specific cases, such as the alternative taxation regimes introduced in recent years for high-net-worth individuals transfer - ring their tax residence to Greece, foreign pensioners
and certain employees or self-employed individuals relocating to Greece, subject to statutory conditions. 2.4 Taxation of Non-Resident Individuals Individuals who are not tax residents in Greece are subject to tax in Greece only on income arising from Greek sources. Greek-source income generally includes, inter alia: • employment income derived from services ren - dered in Greece; • business income attributable to a permanent establishment or fixed base maintained in Greece, or otherwise derived from business activities car - ried out in Greece; • income from immovable property situated in Greece, including rental income and capital gains from the disposal of Greek real estate; • capital income arising in Greece, such as dividends distributed by Greek entities, interest paid by Greek residents or permanent establishments and royal - ties paid for the use of rights within Greece; and • capital gains from the transfer of shares or other participations in Greek entities, subject to the spe - cific conditions set out in the Income Tax Code. Greek-source income of non-resident individuals is taxed in accordance with the rules applicable to the relevant income category. Certain types of income (eg, dividends, interest and royalties) are typically sub - ject to withholding tax at source, which may exhaust the Greek tax liability where provided by law. Other income, such as rental income or business profits, is subject to tax by filing a Greek income tax return. The taxation of non-residents is subject to the provi - sions of any applicable double taxation treaty, which may limit Greece’s taxing rights or provide for reduced withholding tax rates or exemptions. 2.5 Tax Residence of Legal Entities A legal entity is considered a tax resident of Greece for any given tax year if any of the following criteria are met: • the entity has been incorporated or established in accordance with Greek law;
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