Exemption from tax on donations of movable assets located abroad for Greek nationals who reside abroad
Already as of 31/7/2020, a provision had been added by article 6 of Law 4714/2020 to Section C of article 43 of the Code of Inheritance, Donations and Parental Gifts Tax (Law 2961 /2001, hereinafter referred to as the “Code”), as case g’, which provided for the exemption from tax “for gifts of movable assets located abroad and not acquired in Greece during the last twelve (12) years by a Greek citizen who has been resident abroad for at least ten (10) consecutive years and, in the case of relocation to Greece, no more than five (5) years have elapsed.”
Article 147 of Law no. 4887/2022 further amended, as of 4.2.2022, the aforementioned paragraph g of Section C of Article 43 of the Code, with the following changes:
- The tax exemption now refers to “donations of movable property located, at the time of the donation, in a foreign country, by a Greek citizen who has been resident abroad for at least ten (10) consecutive years and, in the case of relocation to Greece, no more than five (5) years have elapsed. The exemption does not apply if the tax authority proves that the assets were acquired during the last twelve (12) years in Greece.
Consequently, on the one hand, it is clarified that the assets must be located in the foreign country at the time of the donation, and, on the other hand, the burden of proof is transferred to the tax authority to prove that the exemption does not apply on the grounds that the moveable assets were acquired in Greece during the last 12 years.
- A new exemption case was added, according to which “for Greek nationals who have been resident abroad for at least twenty (20) consecutive years and have not relocated at the time of the donation in Greece, the donated movable assets located abroad at the time of the donation are exempt.”
According to the above-mentioned addition, as of 4.2.2022, another exemption from gift tax is also provided for donated movable assets (including money, movable assets, etc.) located abroad at the time of the donation by Greek nationals who have been resident abroad for at least twenty (20) consecutive years and have not relocated in Greece at the time of the donation.
Furthermore, according to the explanatory memorandum of Law no. 4887/2022, which amended the above provision, it is noted that the new exemption is introduced because Greeks who have been living abroad for at least twenty (20) years and have not relocated to Greece, have been alienated from the economic life of Greece and it is reasonably presumed that their assets, located abroad, have been acquired there. For this reason, an exemption is granted for the lifetime gift of their movable assets in Greece and even more on terms more onerous than the corresponding exemption provided for in the case of succession, because continuous residence for at least twenty (20) years is required, instead of the ten (10) years applicable for inheritance tax.
Finally, it should be noted that the above exemptions in case (g) do not include the property of civil servants, military personnel and employees of companies based in Greece, provided that these persons have settled abroad because of their status as such, as was also provided for in the original provision.