Non-dom regime (article 5A of the Greek ITC) – Reporting obligations regarding the income and the investment
1. Reporting obligations/tax declarations in Greece regarding a) the foreign income and b) any Greek income
A. Foreign income
Based on the provisions of the non-dom regime of article 5A of the Greek ITC, the taxpayer who has been included in the non-dom regime of article 5A of the Greek ITC, does not have any reporting obligations in Greece regarding their foreign income.
Moreover, there is no tax declaration obligation in relation to the lump sum tax amount of the 100.000 Euros.
Instead, the competent Tax Office for Residents Abroad and for Alternative Taxation of Domestic Residents will issue a Tax Assessment Act for the total tax obligation of the lump sum tax amount of 100.000 Euro, for each tax year, at the latest until the last working day of June. This Tax Assessment Act is issued for the total tax obligation, in the name of the taxpayer, and indicates the corresponding lump sum tax. The tax amount must be paid in full in one installment by the last working day of July and is not offset against any other tax liability that the taxpayer may have in Greece or against any tax that has been paid abroad.
If any of the eligible relatives are also included in the non-dom regime (following an application for the extension of the non-dom regime also to such relatives of the taxpayer) then the Tax Assessment Act also includes the name of the relative and the corresponding lump sum tax amount for the relative (20.000 Euros/per relative).
B. Greek income
In case the taxpayer incurs any Greek-sourced income, e.g. from real estate in Greece, he will be required to file a separate Greek tax return in order to declare such Greek-sourced income and pay the applicable Greek income tax, according to the applicable Greek tax legislation.
2.Investment in Greece for the purposes of the non-dom regime – Involvement of a relative in the investment – Reporting obligations
The investment can be made either by the taxpayer or by another relative (investor).
The amount of the investment cannot be less than 500.000 Euros and the investment must be completed within 3 years from the date of submission of the application for inclusion in the non-dom regime.
The reporting obligations for the implementation, completion and retention of the investment are the following, per stage of the investment:
C. Upon the submission of the application for inclusion in the non-dom regime:
For the proof of implementation of the investment upon the inclusion of the taxpayer in the regime, in case the investment is not completed at that time, the relevant request is accompanied by an Investment Documentation Annex, which includes a presentation of the investment and its implementation stage in physical and financial terms, the budgeted amounts for its completion and the sources of financing, a completion schedule as well as the supporting documentations that are required on a case-by-case basis, depending on the investment.
In case the application for the inclusion in the non-dom regime was not accompanied by any documentation on the investment, then the taxpayer should submit to the competent Tax Office of Residents Abroad and Alternative Taxation for Greek Tax Residents the following documentation regarding the intended investment:
- The Investment Documentation Annex, which includes a presentation of the investment and its implementation stage in physical and financial terms, the budgeted amounts for its completion, the sources of financing and a completion schedule.
- The required supporting documentation, depending on the type of the investment, as stipulated by article 5 par. 2 of the Common Decision of the Ministers of Finance and Development and Investments No 147269 ΕΞ 2020.
- Documentation of the sources of financing of the investment based on certificates of quarterly movement of bank deposits and / or securities.
- A certified auditor’s report attesting the Investment Documentation Annex.
In addition, in case the investment is made by a relative:
- The above Investment Documentation Annex must include a Section with the details of the investor and the type of the relationship.
- Certificate or attestation or any document from a domestic or foreign public authority from which the relationship is evidenced.
- Solemn declaration of article 8 of law 1599/1986 by the investor, in which the investor declares the object and the amount of the investment that they realize or have completed as well as that they have become aware of the taxpayer’s application for inclusion in the non-dom regime, the obligations for the manner of implementation, for the maintenance of the investment and provision of information as well as data and supporting documents concerning it, as well as that they undertake to inform the competent department (of the Ministry of Development) for any change in the investment throughout the period of the taxpayer’s inclusion in the regime and until the end of the retention period of the investment or the revocation of the regime
D. During the time from inclusion in the regime and until the certification of the completion of the investment:
The taxpayer must submit to the Directorate of Foreign Funds, Department of Companies, Transfer Pricing Services and Direct Investments, of the General Directorate of Private Investments of the Ministry of Development and Investments, by the 31st of May of each year, and whenever requested, the following documentation:
- An Annual Report, concerning the implementation stage in which the investment is.
- The required supporting documentation, depending on the type of the investment and the stage of the investment, as stipulated by article 5 par. 2 of the Common Decision of the Ministers of Finance and Development and Investments No 147269 ΕΞ 2020.
- A certified auditor’s report attesting the Annual Report.
In addition, in case the investment is made by a relative:
- A Solemn Declaration of article 8 of law 1599/1986, by the investor and the taxpayer in which they declare that their relationship remains in force, if it is subject to change.
E. For the certification of the completion of the investment:
The investment is considered completed if the entire physical object has been implemented and the total of its expenses has been paid.
The taxpayer must submit to the Tax Office of Residents Abroad and Alternative Taxation for Greek Tax Residents the following documentation for the evidence of the completion of the investment, at the latest within 6 months from the lapse of the 3-year period from the date of application for the inclusion in the non-dom regime:
- The Investment Documentation Annex, which includes a presentation of the investment as physical object and an analysis of the relevant amounts.
- The required supporting documentation, depending on the type of the investment, as stipulated by article 5 par. 2 of the Common Decision of the Ministers of Finance and Development and Investments No 147269 ΕΞ 2020.
- A certified auditor’s report attesting the Investment Documentation Annex.
In addition, in case the investment is made by a relative:
- The above Investment Documentation Annex must include a Section with the details of the investor and the relationship.
- Certificate or attestation or any document from a domestic or foreign public authority from which the relationship is evidenced.
- Solemn declaration of article 8 of law 1599/1986 by the investor, in which they declare the object and the amount of the investment that they realize or have completed as well as that they have become aware of the taxpayer’s application for inclusion in the non-dom regime, the obligations for the manner of implementation, for the maintenance of the investment and provision of information as well as data and supporting documents concerning it, as well as that they undertake to inform the competent department (of the Ministry of Development) for any change in the investment throughout the period of inclusion in the regime and until the end of the retention period of the investment or the revocation of the regime.
The Tax Office for Residents Abroad and Alternative Taxation of Greek Tax Residents, to which the requests for completion of the investment are submitted, after confirming and supplementing the data of the Investment Documentation Annex with any relevant data available to the tax authority, forwards them with an Information Note to the competent department of the Ministry of Development and Investment for expressing an opinion regarding the proof of the investment.
F. After the completion of the investment, for monitoring its maintenance:
The taxpayer must submit to the Directorate of Foreign Funds, Department of Companies, Transfer Pricing Services and Direct Investments, of the General Directorate of Private Investments of the Ministry of Development and Investments, by the 31st of May 3of each year, and whenever requested, the following documentation:
- An Annual Report concerning the retention of the investment.
- The required supporting documentation, depending on the type of the investment, as stipulated by article 5 par. 3 of the Common Decision of the Ministers of Finance and Development and Investments No 147269 ΕΞ 2020.
- A certified auditor’s report attesting the Annual Report.
In addition, in case the investment is made by a relative:
- A Solemn Declaration of article 8 of law 1599/1986, by the investor and the taxpayer in which they declare that their relationship remains in force, if it is subject to change.
The taxpayer is obliged to maintain the investment in Greece for the entire period of inclusion in the regime (i.e. up to 15 years). In case the investment is implemented by a relative, the latter must maintain the investment in Greece for the entire period.
Both the taxpayer and the investor (relative) must declare to the competent department any change in the investment or in their relationship (if applicable), no later than 2 months from the date when the change occurs. The competent department informs the competent Tax Office for the notified changes as well as for any observed omissions of their timely notification and issues an opinion regarding the fulfillment of the conditions.
* 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.