Tax residence and habitual residence – Concept and conditions

Tax residence and habitual residence – Concept and conditions

The purpose of this article is to inform at first stage all those who reside outside Greece who are not aware of the process but also whether they meet the criteria to transfer their tax residence abroad.

We would like to point out that each case of tax residence transfer is separate and may require more attention than usual cases.


Tax Resident of Greece – When this must be changed?

In order to understand our analysis, we must first define the criteria that must be applied for an individual to be considered as a tax resident of Greece.

More specifically, a tax resident of Greece is considered an individual, when the following criteria apply:

  1. his permanent or principal residence or his habitual residence or the center of his vital interests,(his personal, economic, social or professional activity are situated in Greece,
  2. holds the status of consular, diplomatic or public servant of similar status or is a civil servant of Greek nationality and serves abroad,
  3. resides in Greece for more than 183 days a year, continuously or intermittently- touristic, educational or medical traveling is dealt differently.

He/She is then considered a tax resident of Greece for that tax year.

If the above data do not apply, the person can transfer his tax residence.

The country of tax residence for the taxpayer is the permanent center of vital interests meaning his social, family and professional interests and his/her personal property or income. In other words, the tax residence is where the individual’s physical and financial interests are produced.

It is not possible for an individual to have two tax residences. For example, if a person holds the nationality of one State and resides in another State may have only one principal tax residence at the place of its principal and permanent establishment.


Therefore, a person who is considered a tax resident abroad for Greece cannot have a permanent tax residence in Greece but only secondary residences.

From a tax point of view, this second residence in Greece will be listed in Table 5 of Form E1 of the income tax return, in the line indicated in the secondary residence declaration, following the instructions given in the Instruction leaflet for each year.


In conclusion, residence is therefore presumed to be habitual, unless the taxpayer gives proof of his residence in another State.

An example of this, is the submission of a Certificate of Residence by another State in which the individual resides and pays his taxes, if a SADF has been signed between Greece and that State.

In addition, permanent residence in a country is determined by the length of time a person is in a country, that is to say at least 183 consecutive or intermittent days a year. To be considered a tax resident of Greece, you must have resided in Greece for at least 183+ calendar days. These days, in addition to the days of proven residence in Greece, are considered the day of arrival and departure of the person from Greece as well as the days of holidays.


At this point it is important to mention the exceptions that ordinary residence in a foreign country does not apply and Greece is considered a tax residence even though the natural person resides abroad for more than 183 days a year.

These cases are:

  • Educational goals such as studying at a university or another school in a foreign country. Studying in another country does not mean that the student is habitually resident in that country.
  • In case of hospitalization outside Greece the patient cannot rely on his place of hospitalization abroad for tax purposes.
  • Prisoners in prison outside Greece
  • Touristic reasons. Staying abroad without earning income or working.

The process of proof of tax residence abroad must be carried out by the person who wishes to transfer his tax residence by providing the necessary supporting documents certifying that his habitual residence and his vital interests are abroad.

If these documents are not submitted, the person is considered a tax resident of Greece and is liable to file a tax return in Greece stating his worldwide income and being taxed thereon, even if he is resident abroad.

This procedure was adopted as there were incidents of persons residing abroad who were able to transfer their tax residence without taking into consideration where their financial interests were. As a result, they were exempted from tax filing in Greece and thus part of the income that had to be taxed in Greece was not declared and either taxed abroad at lower rates or not taxed at all. (e.g.dividends and interest on deposits).


Benefits of resident abroad

Some of the most important advantages that a foreign tax resident gets are:

  • It is possible to import foreign currency into Greece without having to declare where it came from. In order for this advantage to apply, the process of currency exchange must be made through a bank.
  • He/She is not taxed for his world income in Greece.
  • A person who is considered to be a resident of a foreign country submits a tax return to Greece if he / she receives income from Greece and declares only the income in question and not the income from a foreign country. Except where a foreigner has imported foreign currency into Greece for investment purposes, then a tax return must be submitted in Greece.



Maria Dianellou- Tax Advisor –Taxblock Team


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