Tax treatment of joint bank accounts in the event of succession
The joint bank account in Greek law is governed by the provisions of Law 5638/1932, as amended and in force. The basic feature of a joint bank account is that it has several beneficiaries, each of whom may use the account in whole or in part, without the cooperation of the other joint holders.
The internal relationship linking the joint beneficiaries may be a burdensome (company, loan) or gratuitous (donation/parental gift) relationship. It should, however, be made clear that the mere entry of a beneficiary into a bank account does not in itself constitute a taxable transaction. On the contrary, a taxable transaction may arise if a joint beneficiary subsequently uses the funds in the joint account (e.g. transfers them to his/her own account), and is unable to prove in any tax audit that the transferred funds are derived from his/her own income.
However, joint bank accounts have a significant tax advantage. According to the Code, a bank deposit in euros or foreign currency in the name of two or more joint beneficiaries, as well as joint accounts of other domestic or foreign financial products, regardless of the residence of the joint beneficiaries, after the death of any of them, for all surviving joint beneficiaries, to whom it passes automatically, and up to the last of them, is exempt from inheritance tax. The only condition for the exemption from inheritance tax which would normally be due to the joint beneficiary is that the bank contract must expressly include the additional condition that on the death of any beneficiary the deposit and account thereof shall pass automatically to the other survivors up to the last of them.
This exemption does not apply to financial deposits and accounts held in non-cooperative states in the tax area and in states that have not concluded and do not apply with Greece an administrative assistance agreement in the tax area or have not signed and do not apply with Greece the Multilateral Agreement of Competent Authorities for the Automatic Exchange of Financial Account Information that has been ratified by Law 4428/2016.
It is noted that the taxpayer is obliged to submit an inheritance tax return with exemption from the obligation to pay tax under Article 25 of the Code.
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.