Tax Residence – Definition criteria

Based on the last amendments of the Income Tax Code and especially on the term of Article 4 regarding tax residence, which took place via Article 1 Law 4646/2019 , the basic criteria for the definition of the tax residence for individuals and legal persons are as follows :

Α. Legal Persons
– Establishment of legal person according to the Greek legislation
– Registered office in Greece
– Place of real management in Greece. This means : i) place of daily management ii) place of strategic decisions making iii) place of annual general meeting iv) place of bookkeeping and info v) place of meeting for legal person ‘s management vi) place of residence for legal person ‘s management members vii) place of residence for the majority of shareholders

Note : Following the above mentioned, it is clear that Tax Management has numerous tools for defining the tax residence of a legal person.

Beyond the official documentation, such as Statute and General Meetings’ / Board of Directors’ Minutes, definition criteria could be the place of important decision making -for example decision about investment in real estate, contract of loan with Greek bank, placing in investment law ; also the place of daily management as it is implied by the use of office space where high executives of the legal person work ; from the number of the administrative employees ; from the place that is the basic reference place for the legal person etc. We should not ignore that another criteria could be the real residence of partners / shareholders / real holders, as it is defined by the term of Article 4 of Income Tax Code for both legal persons or individuals (as it is analysed below).

Β. Individuals
– Permanent residence in Greece
– Habitual residence in Greece
– Greece as center of crucial interests -personal and financial- of individual. This means that for the compliance of this criteria, Tax Management may take into considerations factors like residence of other members of family, the children school, residence of wife / husband, place of employment for the individual or/and rest family members, bank accounts, place of use of cash cards and bank accounts, use of owned or rented homes and cars, use of landline or mobile phones, social media etc
– Evidence is the staying of the individual in Greece for a period over 183 days during 12 months. In this case, the individual is considered retrospectively resident of Greece from the first day of his presence in Greece.
– Exception is staying in Greece for touristic, medical, healing and private reasons, under the term that staying is not longer than 365 days (including short periods of staying abroad)

Conclusion
Tax Management has the option to evaluate the info that has collected, in order to conclude regarding the tax residence of legal persons and individuals. Moreover, modern technology assists the verification of the real place of presence or activity ; internet use for transactions and communication, the imprint we daily leave in any way, real place of a legal person ‘s management, real place of staying for individuals -both for legal person ‘s member or individual.

Aegean Consulting can professionally assist, consult and guide you for the shaping and the implementation of your plans, based on real conditions and on real needs of yours.

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