Galery

1

Anastasia Balezdrova

Those foreigners who receive a pension from Greece must declare the money in the country, regardless of whether they live in it or not. With regard to residents of countries with which Greece has signed agreements to avoid double taxation of income and property, when a retiree receives a pension from both countries, he or she must declare his or her income in terms of each pension in the relevant country whereas the income tax will be deducted under the bilateral agreement. Bulgaria and Greece have signed such an agreement that has been valid since the year 2000.

The International Economic Relations Office at the Greek Ministry of Finance has provided the explanation to GRReporter, as we sought information on the topic in response to a question raised by our readers.

The agreement states:

"Article 18

PENSIONS

1. Accounting for the provisions of para.2, Art.19, a pension and other similar remuneration paid to a resident of one of the contracting states in connection with his or her past employment shall be taxable only in that state.

2. Notwithstanding para.1, the payments under the social security legislation of one of the contracting states shall be taxable only in that state."

The provisions of para.2, Art.19, are as follows: "Every pension paid by, or through, funds created by one of the contracting states, its political subdivision or a local authority thereof to an individual for services rendered to that state, subdivision or local authority thereof shall be taxable only in that state".

However, the following exception applies to the citizens of European Union member states: Those of them who receive from Greece an amount equal to or greater than 90 percent of their total income do not pay tax on the first 5,000 euro.

In contrast, residents of countries outside the European Union who have an income in Greece pay a 22% tax on their total income, whether it is distributed between Greece and the other country or not.

It is worth noting that, under the law, every individual is considered a resident of Greece if he or she resides in the country for more than 183 days a year. In this case, the person loses the right of not paying tax on the first 5,000 euro of his or her income.

The change in the status of the interested parties can be proved by a certificate of residence pursuant to the bilateral agreements to avoid double taxation. The certificates of Bulgarian residents are issued by the National Revenue Agency.

Foreigners are required to submit their tax returns to the tax offices for residents of other states (Δ.Ο.Υ. Κατοίκων Εξωτερικού), which are located in major cities, regional centres. The returns may also be submitted online. Those who are interested in the matter should contact the specific departments for more information.