New tax exemption for donations of foreign movable assets by Greek citizens resident abroad
Already as of 31/7/2020, by virtue of article 6 of Law 4714/2020, a new provision had been added to Section C of article 43 of the Code of Inheritance, Donations and Parental Benefits Tax (Law 2961 /2001, hereinafter referred to as the “Code”), as case g’, which provided for a tax exemption “for gifts of movable assets located abroad and not acquired during the last twelve (12) years in Greece, 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.“
By virtue of article 147 of Law 4887/2022 the above case g’ of Section C of Article 43 of the Code was amended once again, effective as of 4.2.2022, , with the following changes:
- The already provided tax exemption, as noted above, was rephrased to refer to “gifts of movable assets located, at the time of the donation, abroad, 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, unless the tax authority proves that the assets were acquired during the last twelve (12) years in Greece”.
Therefore, on the one hand, it is clarified that the assets must be located abroad at the time of the donation and, on the other hand, the burden of proof regarding potential acquisition of the assets in Greece during the last 12 years is shifted to the tax authority.
- A new case of tax exemption was added, according to which “for Greek citizens who have been resident abroad for at least twenty (20) consecutive years and have not relocated to Greece at the time of the donation, the donated movable assets, located abroad at the time of the donation, are exempt.”
According to the above addition, effective as of 4.2.2022, a new exemption from gift tax is provided for donated movable assets (including money, movable assets, etc.) located abroad at the time of the donation by Greek citizens 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 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 abroad. For this reason, an exemption is granted for the donation of their movable assets in Greece and, in fact, on terms more onerous than those required for the corresponding exemption for the case of succession, since a continuous residence abroad of at least twenty (20) years is required, instead of the ten (10) years required for inheritance tax.
Finally, it should be noted that the above exemptions provided by 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 capacities as such, as was also stipulated in the original provision.
* The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.