TAX RESIDENCE IN GREECE – CRITERIA & SIGNIFICANCE

The status of tax resident of Greece constitutes the cornerstone for determining the scope of the tax obligation of a person (natural or legal) towards the Greek State. The definition and criteria are clearly set out in the Income Tax Code (ITC). These criteria differ depending on whether they concern natural persons or legal persons.

I. Criteria for Natural Persons

A natural person is considered a tax resident of Greece if they:

1. Reside in Greece for a period that cumulatively exceeds one hundred and eighty-three (183) days, during any twelve-month period.
   • Exception: This criterion does not apply to natural persons who are in Greece exclusively for tourist, medical, therapeutic, or similar private purposes and their stay does not exceed 365 days (including short periods of stay abroad).
2. Have in Greece their permanent or principal residence, their usual abode, or the centre of their vital interests, meaning their personal and economic ties.
3. Are a diplomatic, consular, or public official of a similar status, or a civil servant who holds Greek citizenship and serves abroad.

The basic and important consequence of a natural person’s tax residence in Greece is that they are taxed in Greece on their worldwide income (the income they acquire both in Greece and abroad).

II. Criteria for Legal Persons

A legal person or a legal entity is considered a tax resident of Greece disjunctively if it:

1. Has been constituted or established according to Greek law, or
2. Has its statutory seat in Greece, or
3. The place of effective management is in Greece. For determining the place of effective management, the following are taken into account, indicatively:

• The place of exercise of day-to-day management.
• The place of strategic decision-making.
• The place of the annual assembly of partners/shareholders.
• The place of residence of the members of the governing body.

For a legal person (such as a company), having its tax residence in Greece means that:

1. it is subject to taxation in Greece on the entirety of its worldwide income.
2. if the legal person has income from another country, where it was also taxed, the provisions of the Double Taxation Avoidance Conventions (DTACs) between Greece and the country in question apply to avoid the double taxation of the same income.
3. the legal person is obliged to maintain its accounting records and submit its tax returns in accordance with Greek tax legislation.