Which points should be underlined when considering Double Taxation Conventions concluded between different countries?
• The terms and conditions for obtaining the tax resident status of a state and the conditions for maintaining the taxpayer’s tax residence. According to the Greek law, and in particular according to the Income Tax Code, a natural person is a tax resident of Greece, among others, if he has his permanent or principal residence or habitual residence or the center of his vital interests in Greece, as his personal and financial links.
• What are the types of income to which the Double Taxation Convention applies? Such as the Double Taxation Agreement between Greece and Ukraine, which states that in the case of Ukraine, the income to which the Convention applies is a b) corporate income tax; and b) the income tax on natural persons, and in the case of Greece a) the income and capital tax on natural persons; and b) the income and capital tax on legal persons.
• When is the tax liability exhausted and if there is any additional tax liability? For example, in the DTA between Greece and Belgium, it is provided that when a resident of Greece obtains income taxed in Belgium under the provisions of the Convention, Greece deducts from the tax imposed on the income of such resident an amount equal to the tax income paid in Belgium. If the taxpayer’s income tax has been cleared in Belgium, Greece deducts the amount of tax paid in Belgium from the tax imposed on her resident income. However, this deduction may not exceed the part of the tax corresponding to that income in the country.
• Justification of sources of acquisition of capital for the acquisition of various goods (movable and immovable property).
• World income taxation, for example the tax resident living abroad who obtains income in Greece, should consider on the basis of the tax legislation of the country of his tax residence, if he is obliged to declare the income he acquired in Greece. In this (usual) case, the possibility of crediting the tax paid to our country for this income should be investigated, compared to the tax due abroad, such as the Double Taxation Avoidance Agreement concluded between Greece and of Cyprus.