Emigration Tax Consequences in Greece

AuthorVera Georgaki
PositionPhD Candidate in Tax Law at the University of Thessaloniki
Pages1-17
European Tax Studies 1/2010
News and Commentary - Exit T ax: Comparative Analysis in a EU Perspective (n. 1/2009)
© Copyright Seast - All ri ghts reserved
1
Emigration Tax Consequences in Greece
Vera Georga ki1
1. Introductio n.
The newly-adopted Law n. 3943/2011 (Official Government Gazette issue Α
66/31.03.2011)2 has brought about significant changes in the national
income taxation system (Income Taxation Code L. 2238/1994, hereinafter
Code), as to the notion of “fiscal resident”3, as well as the tax
consequences in case of transfer of domicile or habitual residence abroad.
According to its heading “Fighting fraud, staffin g audit and other provision s
concerning the Ministry of Fina nce”, and its explanatory memorandum as
well, especially with regard to the article 12 as being illustrated below, it is
obvious that the greek legislator aims at establishing a more efficient legal
framework in order to combat the systemati c tax avoidan ce that has been
developed mainly the last years”. Moreover, in the first part headed
General pre sentation” of the memorandum (A.II) is mentioned that “..At
international level, t he phen omenon of tax ev asion is being developed by
opting to be subject to tax ation of countries or jurisdi ctions with no o r
particularly low taxatio n for the natural or legal persons or legal entitie s of
any kind and description..”. Notwithstanding the anti-abuse objectives of
these new provisions, it must be pointed out that according to consistent
case law of the Court of Justice, despite the field of direct taxation being
outside the competences of community legislative organs, the Member
1 PhD Candidate in Tax Law at the University of Thessaloniki.
2 Ministry of Finance.
3 According to the article 2 par. 1 of the Code estab lishing residence as the connecti ng factor
determining the extent of tax liabil ity, “The natural person who has his domicile or habitual
residence in Greece, i s subject to tax for his worldwide i ncome”. The new provision inserted
in the third indent of the same paragraph pr ovides that “The reside nce in Greece i s
considered habitual if ex ceeds 1 83 day s durin g the same calendar year. Habitual residenc e
is presumed unless the taxpayer proves t he contrary”.
European Tax Studies 1/2010
News and Commentary - Exit T ax: Comparative Analysis in a EU Perspective (n. 1/2009)
© Copyright Seast - All ri ghts reserved
2
States have to comply with the imperative principles of Community Law4
concerning the preclusion of national provisions, restrictive of the
fundamental general freedom of movement of persons and its specific
manifestations of freedom of movement of workers and freedom of
establishment, as well as the freedom of movement of capital, enshrined in
articles 21, 45, 49 and 63 TFEU5 respectively. The same freedoms are, also,
provided for by the respective horizontal provisions of the European
Economic Area Agreement, in articles 28, 31 and 40.
2. Emigration to non-coo perative stat es.
The article 12 par. 6 of the abovementioned new Act of Law, embodied in
article 76 par. 5 of the Code, provides as follows:If a person liable to tax
return transfers his domicile or habitual residence to a state included in the
catalogue of the states containe d in the para graph 4 o f the arti cle 51A, he
is co nsidered as having his domicile i n Gr eece and is subject to tax for his
worldwide income pur suant to th e first indent of t he par agraph 1 of art icle
26”. Art. 51A par. 4 provides: Non-coope rative7 are those state s that are
not member states of the European Union, their situ ation with regard to
transparency and information exchange on tax matters has been examined
by the Org anisation for Economi c Cooperation and Devel opment (OECD),
and which: a) have not concluded a c onvention of administrative assistance
on the field of t axation and b) have not concluded such convention of
administrative assistance wit h other 12 states at lea st. T he above
conditions m ust be met joi ntly”.
4 ECJ 18 January 2007, C-104/06 Commission of the European Communities v Kingdom of
Sweden [2006] ECR I-00671 para 12. ECJ 13 D ecember 2005, C-446/03 Marks & Spencer
[2005] ECR I-10837 para 29.
5 TFEU.
6 See footnote 3.
7 Andorra, Anguilla, Antigua & Barbuda, Aruba, the Bahamas, Bahrain, Barbados, Bermuda,
Belize, British Virgin Islands, Brunei, Cayman Islands the Cook Islands, Costa Ri ca, Chile,
Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Isle of Man, Jer sey, Lebanon, Liberia,
Liechtenstein, Malaysia, Marshall Islands, Mo ntserrat, Ma uritius, Monaco, Nauru, Netherland
Antilles, FYROM, Niue, Panama, Philippines, St. L ucia, St. Kitts and Nevis, St. Vincent and
the Grenadines, S amoa, Seychelles, Singapore, Turks and Caic os, U S Virgin Islands,
Vanuatu, Uruguay, Hong-Kong.

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