All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Greece confirms guidelines of foreign tax credits for special solidarity contributions

The development should clarify the scenario for Greek tax residents with a foreign-sourced financial income

Konstantinos Mavraganis of EY Greece analyses the new guidance issued for double tax relief which includes the upgrading functionality of the Greek Double Tax Conventions network.

In an expected move, the Greek tax administration has acknowledged that paid foreign tax is credited against domestic special solidarity tax. This development could be of importance for Greek tax residents who earn foreign-sourced financial income.



In compliance with the decision no. 2465/2018 of Greece’s Supreme Administrative Court, according to which the special solidarity tax, as provided by Article 29 of L. 3986/2011 and Article 43A of the Greek Code of Income Tax, constitutes an “ordinary” or regular tax on income which falls within the scope of the double tax conventions (DTCs) signed by Greece. The Greek tax administration issued Circular E.2147/2019 acknowledging that the foreign income tax paid by a Greek tax resident individual is allowed to be set-off against the domestic special solidarity tax amount due. 



Before that, the Greek tax administration had accepted that a foreign tax resident, who – based on the provisions of the applicable DTC – is exempted from income tax, should also be exempted from Greek special solidarity tax.

Of all the 57 DTCs signed by Greece, only the one with India provides for this exemption as a double tax relief method, while the rest 56 DTCs provide for a double tax relief through the limited tax credit method, similar to what is provided by Article 23 B of the OECD’s Model Tax Convention for the avoidance of double taxation. 



Until now, the Greek tax administration had not been keen to clear its stance as to whether or not the agreements for the avoidance of DTCs signed by Greece with partner countries allow for a credit of the foreign tax paid against domestic special solidarity tax. Thus, in practice, the foreign tax paid was credited against only the amount of domestic income tax. 

The impact of the circular is retroactive, as it allows the taxpayers to claim from 2015 onwards and ask for the foreign tax credit against the special solidarity tax assessed, even though they have already filed their tax returns and eventually paid the relevant income tax assessment notices. The amending tax return may be timely submitted until the last working day of 2019. 

The Circular E.2147/2019 includes a further step to implement the 2465/2018 decision of the Supreme Administrative Court, adding to the correct interpretation of the scope of Article 1 of the DTC, and protecting further the legal supremacy of the DTCs. It is noted that a credit may be available in any case only up to the aggregate amount of the Greek income tax and special solidarity tax due (limited tax credit). 

It remains to be seen whether the above development could also enable a foreign special solidarity tax to be easily recognised by the Greek tax administration as eligible for a foreign tax credit against the aggregate amount of Greek income tax and Greek special solidarity tax due. 





Konstantinos Mavraganis

T: +30 694 04 46 690 

E: Konstantinos.Mavraganis@gr.ey.com 





more across site & bottom lb ros

More from across our site

Incoming amendments to the treaty could increase costs on non-resident Indian service providers.
Experts say the proposed minimum tax does not align with the OECD’s pillar two regime and risks other countries pulling out.
The Malawian government has targeted US gemstone miner Columbia Gem House, while Amgen has successfully consolidated two separate tax disputes with the Internal Revenue Service.
ITR's latest quarterly PDF is now live, leading on the rise of tax technology.
ITR is delighted to reveal all the shortlisted firms, teams, and practitioners for the 2022 Americas Tax Awards – winners to be announced on September 22
‘Care’ is the operative word as HMRC seeks to clamp down on transfer pricing breaches next year.
Tax directors tell ITR that the CRA’s clampdown on unpaid taxes on insurance premiums is causing uncertainty for businesses as they try to stay compliant.
HMRC has informed tax directors that it will impose automated assessments on online sellers with inaccurate VAT returns, in a bid to fight fraud.
UK businesses need to reset after the Upper Tribunal ruled against BlackRock over interest deductions it claimed on $4 billion in inter-company loans, say sources.
Hong Kong SAR’s incoming regime for foreign income exemptions could remove it from an EU tax watchlist but hand Singapore top spot in APAC.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree