Greece has entered into Double Tax Treaties (DTT) with a broad range of countries across the globe. As a consultancy that specialises in serving expats and non-residents, we have a comprehensive knowledge of many of the DTT. Double Tax Treaties are generally entered into to avoid the problem of double taxation on individuals and corporations, as well as to support and encourage cross-border trade and investment and to encourage foreign direct investment overall.
Countries with which Greece has Double Tax Treaties in place
The agreements aim to provide clear guidelines on which country as the right to tax what income. Greece currently has double tax treaties in place with the below countries:
Albania; Armenia; Austria; Azerbaijan; Belgium; Bosnia and Herzegovina; Bulgaria; Canada; China; Croatia; Cyprus; Czech Republic Domestic; Denmark; Egypt; Estonia; Finland; France; Georgia; Germany; Hungary; Iceland; India Domestic Domestic Domestic; Ireland; Israel Domestic; Italy; Korea, Republic of; Kuwait; Latvia; Lithuania; Luxembourg; Malta; Mexico; Moldova; Morocco; Netherlands; Norway; Poland; Portugal; Qatar; Romania; Russia; San Marino; Saudi Arabia; Serbia; Singapore; Slovakia; Slovenia; South Africa; Spain; Switzerland; Tunisia; Turkey; Ukraine; United Arab Emirates; United Kingdom; United States and Uzbekistan.
A closer look at the UK – Greece Double Tax Treaty
The DTT between Greece and the United Kingdom was developed to prevent the double taxation of income and capital gains. It applies to both businesses and individuals. You can get in touch with our team if you would like a copy of it to review. There is a framework allocating tax rights between the two countries and most importantly for our clients, ensuring you our your business is only taxed once when undertaking cross border activities.
The types of income that are covered by the treaty include:
- Employment
- Pensions
- Business profits
- Dividends
In terms of where the income is taxed, there is a general rule of thumb in the treaty which refers to the country of residence or the country where the income arises.
In addition to providing a tax credit mechanism, the DTT enables the exchange of information between the tax authorities – thus helping to prevent tax evasion.
For our clients, the DTT provides clarity as to the tax credits available on foreign dividends and the taxes to be paid on income and where they need to be paid.
A closer look at the Greece – United States Double Tax Treaty:
Similar to the treaty with the UK, the double tax treaty between Greece and the United States is also designed to ensure there is no double taxation of individuals or businesses in the United States and Greece. Nearly all forms of income are covered in the agreement, including but not limited to:
- Business profits
- Dividends
- Royalties
- Employment
The benefit to our clients is that there is certain around what tax needs to be paid where, as well as the provision of tax credits. This is particularly important when assessing the tax implications of property sales and inheritances.
Establishment and operation
The tax treaty between Greece and the United States dates back to 1950. The treaty has a savings clause in place that limits the application of the treaty to certain residents and citizens. The clause states that:
(1) Notwithstanding any provision of the present Convention each of the Contracting States, in determining the taxes, including all surtaxes and complementary taxes, of its citizens, subjects, residents or corporations, may include in the basis upon which such taxes are imposed all items of income taxable under its revenue laws as though this Convention had not come into effect.
There is a component of the treaty related to government employees. It ensures that government employees receiving wages, salaries or a pension by a contracting state, which is provided by that specific state, will be taxed by that state and exempt in the other state.
Article 3
Article three of the United States and Greece Double Tax Treaty ensures that commercial and industrial profits are not taxed. It means that there is limited ability to countries to tax interest.
For example, in a hypothetical case where a greek resident is not conducting or engaged in any business in the united states, but they are receiving interest from a specific source in the United States, the greek resident is exempt from tax by the United States. I.e. there is no tax payable as they are not a United States resident. The same applies to a United States resident not conducting business in Greece (although there is a 9% limit)
Article 6 – Dividends
This is a simple section of the DTT which essentially states that a Greek corporation will be exempt from US tax unless the recipient of the dividend is a citizen resident or corporation resident of the US.
Article 14 – Foreign Tax Credit
An extract is provided below:
(1) Notwithstanding any provision of the present Convention each of the Contracting States, in determining the taxes, including all surtaxes and complementary taxes, of its citizens, subjects, residents or corporations, may include in the basis upon which such taxes are imposed all items of income taxable under its revenue laws as though this Convention had not come into effect.
(2) Subject to section 131 of the United States Internal Revenue Code, Greek tax shall be allowed as a credit against United States tax.
(3) Greece will allow against Greek tax a credit for the amount of United States tax imposed upon income from sources within the United States but in an amount not exceeding the amount of the Greek tax imposed upon such income.
This is a foreign tax credit provision which is common in most double tax treaties. It ensures that where a person pays taxes in one country, they can get a credit on their tax return in the other country.
Article 18 – Exchange of information between the tax departments
An extract from the treaty is provided below:
The competent authorities of the Contracting States shall exchange such information (being information which such authorities have at their disposal) as is necessary for carrying out the provisions of the present Convention or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of the present Convention.
Any information so exchanged shall be treated as secret and shall not be disclosed to any parson other than those concerned with the assessment and collection of the taxes which are the subject of the present Convention. No information shall be exchanged which would disclose a technical secret, or process relating to trade, industry, business, or a profession.
The above section essentially means the two countries will cooperate with each other. It ensures that the tax departments communicate with each other and exchange information (not including technical secrets).
Banks in Greece that report US Account Holders
To find out which banks and financial institutions in Greece report US account holders you can follow the attached link and view the FFI list.
Other benefits of Greece’s Double Tax Treaties
One of the additional benefits of double tax treaties Greece has in place is the establishment of mutual agreement procedures for dispute resolution. This helps our clients resolve any double taxation issues quickly and efficiently.
Our experience in advising non-resident and expat clients on Double Tax Treaties with Greece
We have a comprehensive knowledge of some double tax treaties Greece has in place, as well as the skillset to read, interpret and apply the double tax treaties Greece has in place with all countries. Our accountants advise our expat clients on:
- The tax implications for expats and non residents who are receiving dividends from overseas.
- Tax implications if you have investment properties overseas and reside in Greece, or vice-versa.
- Tax implications of owning shares overseas.
- Tax implications of making capital gains.
Contact our team to talk about how our partner accountants can assist with your property, income tax or other needs. We understand the unique challenges facing non-residents, dual citizens and expats and are able to assist.
Client testimonials
We needed urgent advice on the Greece and USA Double Tax Treaty. The Tsaks Consulting team was able to assist. We were dealing with high value sums and therefore accuracy of advice was critical. The team from Tsaks Consulting took the time to explain everything to us and referenced the exact section of the treaty which applied. Tsaks Consulting, and their accounting partners which we dealt with, were highly experienced, prompt in their service and very professional.
Patrick V | Private Individual (HNW) | New York and Santorini
The Tsaks Consulting team, and their accounting partners, are our go to team when we require advice and assistance related to double tax treaties in Greece. Particularly the US / Greece double tax treaty as well as the Greece / Canada double tax treaty. In general, they have a comprehensive knowledge of Greece’s double tax treaty and I would recommend them for assistance if you require tax advice. They also communicate at a professional level with your in-house accounts and legal teams. This is important from our internal operations and ensuring everything in our organisation runs smoothly.
George P | Multinational Corporation | Europe and America