Intro

(I intended to write this back in 2023 but it remained a draft for quite a while. I’ve decided to publish it now.)

This is another blog in the series about returning to Greece and setting up a company. In this part, I’ll explore and document my experience as an expat returning to Greece after 10+ years and applying for Αρθρο 5Γ tax relief. If you don’t know what this is, it’s a 50% tax reduction for 7 years(as of this writing).

Prerequisites

If you have been away for more than 5 years and not getting taxed in Greece, then you can avail of this. You’ll need documentation from the revenue abroad or other means of proving that you were a tax resident of another country. In my case, I exported my tax certificates and P60s(employment income details) for the past 5 years.

First step

To kick off the process I’ve asked my accountant to handle the application. I sent him the documents which were in English, and he made the application with the necessary attachments.

The first problem we encountered was that they asked for the documents to be officially translated. I located a certified/recognized by the state translator in my area and asked her to translate the docs. It was about 20 pages so that was a cost.

Once I received the translated documents, I scanned them and sent them to my accountant to upload them again. The next day the revenue messaged us to tell us that the application was going to the next phase.

Another thing they ask you to submit is a signed statement (υπεύθυνη δήλωση) to state that for the next 2 years, you will remain a tax resident of Greece. This was easily done via GoV.gr so I forwarded the PDF to my accountant to attach to the application.

A few months later

There was a big gap between applying for 5Γ and seeing any progress on it. One thing that went wrong was that due to our judgment to file tax returns for 2022, it was done in a bad way. I didn’t need to file returns in Greece for many years. In 2022, I bought a car that I intended to use for our summer visits in Greece and I reckoned that in 2023 I should likely start filing returns again to make sure that my property (the car) is correctly documented, even though I would still be a foreign tax resident.

In the meanwhile, of course, we decided to return and once we did the first thing I did in early 2023 was to switch my tax residency/address to Greece. Afterward, my accountant tried to file the return for 2022 as a foreign tax resident but the Greek Revenue wouldn’t accept it as their system couldn’t handle the edge case of me being away in 2022 and being able to file it like so after I have moved my residency in 2023. So, they asked us to file it as a Greek resident and reassured us that there wouldn’t be any charges for the inconsistency of income (and the acquisition of the car). So we did. When the Department of Alternative Taxation in Athens started to process my application (in August), they asked for my returns for 2022. We happily provided them and then we received the bad news. The returns for the prior year cannot show you as being a tax resident of Greece 🤦‍♂️. Long story short, it was a difficult journey to change the prior year’s tax returns so I now seem as a Foreign tax resident retroactively. But we did. The lesson we learn though is simple.

If you plan to apply for 5Γ, then do not, under any circumstances, file any tax returns that show you are a Greek Tax resident. Even when the Greek Revenue asks you to! (so they can deal with the edge case).

Ok, but how would you do it differently?

Say you return from Ireland in 2023 November. You spent the majority of 2023 there, so you are a tax resident of Ireland for 2023. You aim to open up shop to invoice or become a permanent employee of a Greek entity in 2024. Then you need to ensure that any tax returns for 2023 are filed BEFORE you switch your tax residency to Greek. If you don’t, then you’ll have a bad time.

Alright, what happened next?

When the sticking point of the bad tax returns was sorted, it took a few weeks to get the OK. Then a few weeks to get the official letter in my taxis notifications that I indeed now have 5Γ for 7 years. All in all, the application will take about 8 months minimum with the current queues. I was told that it’s only two people in Athens who deal with these applications so it’s crucial to start it sooner rather than later. Remember that if you were to return in 2024 to work in Greece, you wouldn’t be asked to pay tax all the way until 2025 fall. That is, if you set up a freelancer setup like I did. So there’s time, but be prudent and start it early.

Reversing the brain drain

I think this is a very good incentive to get people to return. That said, I think that taxation needs to be revamped a bit. IKE is the next most tempting thing at 25% flat tax but other countries around us have much better terms (cough Bulgaria, cough Cyprus ). The cost of living in Greece is not what many would make it so be aware that many things are still expensive.

Infrastructure needs improvement. Internet connections are much inferior to European countries and electricity is going up and down with no warnings (well, unless you live in the major cities, I suppose).

So, overall, happy?

I have a positive outlook for our lives in Greece. I hope things will continue to get better and having people return is going to help the country recover faster.

Remote work is a blessing and while it lasts, there’s no other place in the world that I’d like to work from than from my home country, Greece.