conditions d’affiliation au régime spécial d’impôt 5Γ
The new decision on the conditions and the procedure to be included in the special status of Law 4172/2013 in relation to the special way of taxation of persons who transfer their tax residence to Greece and acquire income in Greece.
The competent agency for the decisions of belonging to the special status is the D.O.Y. of foreign residents. The interested party must submit an application by July 31 of the year he/she started working in Greece. If the application is submitted after July 31, it will be considered for the next tax year. More specifically, a natural person who moves his tax residence to Greece is subject to the special regime if, cumulatively:
- a) did not reside in Greece for the last 5 of the 6 years prior to the transfer of tax residence to Greece.
- b) transfers his tax residence from an EU member country, in a country with which there is an administrative cooperation agreement with Greece in the field of taxation.
- c) provides services in Greece in the context of cooperation with a Greek legal entity or a legal entity with permanent headquarters in Greece.
- d) declares that he will reside in Greece for at least two years after the application.
The applicant must submit together with the application all the necessary legal supporting documents which must bear the stamp of The Hague and be duly translated.
The natural person must transfer his tax residence from a member country of the EU or the European Economic Area or from a country that has entered into a special administrative cooperation agreement in the field of taxation in Greece.
This condition is automatically examined by the tax office for residents abroad. In addition, it is necessary for the employer to submit a certificate which certifies that this person works for him. In case a natural person is an employee and at the same time an entrepreneur, his total income is calculated to determine if he can join the special regime. It can remain in the special status for a maximum of 7 years, after which it is taxed according to the normal tax system.
If, during the 7 years which he is subject to the special status, the natural person ceases to offer his services for a period not exceeding 12 months, he will continue to be subject to the special status provided that, during this period, he will enter into a new employment contract or start a professional activity.
Effects of belonging to the special regime
For the persons who meet all the above conditions and are entitled to join this regime, an administrative tax determination document is issued for the total amount of their income in Greece.
The person who has joined the special regime has to pay only 50% of the income tax and the solidarity levy of article 43A of the Income Tax Code on the income earned during this year.