Greek inheritance taxation is based on the principal that acquiring property without exchange, results to the ability of the person who acquired the property to pay taxes to the state, for the re-allotment of individual funds and for reasons of social policy.
Greek inheritance taxation is regulated by Law 2961/2001. Changes to the Inheritance taxation law have been effected by virtue of the No. 3634/2008 for the reduction and abolishment of Greek inheritance taxation for deaths that occurred after December 13, 2007; date that the relevant law has been submitted for approval to the Greek Parliament. However, the new Government has recently implemented its proclamations and issued tax laws 3842/ 2010 and 3815/2010. The above laws apply for deaths that occurred after January 8, 2010.
Every natural person or legal entity who acquires inherited property is obliged to file Greek inheritance taxation statements for the Greek Estate, declaring to the competent tax authority of the deceased's last residence, the bequest of the inherited assets. In case that there is more than one heir, then each heir is obliged to pay Greek inheritance taxes, depending on the property that he is entitled to. In the Greek inheritance tax statements, the heir has to declare any asset that is bequeathed to him either real estate property (lots, plots, buildings, etc.) or personal (funds, furniture and equipment, stocks, bonds, cars, boats) or even any allowance of funds to any person.
The deadline for filing, the Greek inheritance tax statements arises to six months upon the deceased's passing or upon the will's probate, in case that the deceased has left a will probated by the Greek Court or the Greek Consulate. Said deadline extends to one year, if the deceased passed away abroad. An extension of three months may be granted, upon the relevant application of the heirs for specific reasons (e.g. health problems of the heir, his absence abroad, and encountering difficulties towards collecting the relevant documentation for the filing).
Greek Inheritance tax law provides that the right of the Greek State to collect taxes for deaths that occurred before December 31, 1994 has expired (amending the previous provision which regulated that the right of the Greek State expired for deaths that occurred before December 31, 1989).
For the imposition of the Greek inheritance tax, Greek law has ranked the heirs in categories, depending on their kinship with the deceased. A different Greek inheritance tax structure is provided for each category, providing a tax free amount and a progressive tax scale, depending on the value of the inherited property. Additionally, for the final Greek inheritance tax imposition, any previous tax paid for parental gifts or gift deeds is taken into consideration and reduced from the final Greek inheritance tax imposition.
A number of relatives are included to each tax scale. More specifically:
First category: parents, children, grandchildren, surviving spouse, etc…
Second category: grandparents, great grandchildren, brothers-in law, sisters-in-law, parents-in-law, children of the deceased from previous marriages, etc.
Third category: any other relative who is not included in the above categories or heirs, who do not have kinship with the deceased.
According to the provisions of the Greek Estate tax laws, the Greek inheritance tax imposition is certified and is paid in up to 12 bimonthly installments. Each of such installments cannot be less than €500, except for the last installment. If the amount is paid in full within the deadline for payment of the first installment, then a 5% discount on the total amount is provided. In case that the heir is minor, the installments for payment of the inheritance tax are doubled.
The execution of any Notarial document, by virtue of which ownership on inherited properties is conveyed, is prohibited, without the prior documented tax clearance that there is no Greek inheritance tax due (tax free inheritance or payment up in full).
According to the provisions of inheritance taxation law 3634/2008, the progressive Greek inheritance tax scale for the first two categories of heirs, as determined by the previous tax system of law 2961/2001 is abolished. This law held the tax free amount of €95,000 and €20,000 for each one of the first two tax scales respectively, while the remaining of the properties tax value is taxed in a percentage of 1% for real estate properties, 0, 6% and 1, 2% for stocks and bonds and 10% for the rest of the assets.
Additional changes have been made on the ways of payment of Greek inheritance taxes for the first two categories of heirs. Payment of tax imposition for real estate properties can be made to up to three (3) equal bimonthly installments, while for the rest of the assets payment is effected in six equal bimonthly installments. For the heirs of the third category, payment is effected in 12 equal bimonthly installments.
In an attempt to establish a more fair taxation system and increase the Public Revenues, the new Greek government has proceeded with changes to the previous Inheritance taxation system of laws 3634/2008, 3815/2010 and 3842/2010. According to the provisions of the inheritance taxation law (as is in effect), the tax free amount has increased to €150.000 (instead of €95.000), while the remaining of the inheritance tax value (including real estate and personal assets) is taxed under a progressive tax scale from 1% to 10%.
An increase to the tax free amount has also been effected to the heirs of the second category. The tax free amount has increased from €20.000 to €30.000, while the remaining of the properties tax value is taxed under a progressive tax scale of 5% to 20%.
In case that heir does not belong to one of the above categories, law provides a tax free amount of 6.000€ while the remaining is taxed under a progressive tax scale from 20% to 40%.
The fixed tax that was imposed on bonds, funds, company shares has been abolished. The acquisition of such assets is taxed under the above mentioned tax scales.
Finally, when the inheritance is granted to the surviving spouse of the deceased and/ or his minor children, a tax exemption of €400.000 applies for each of the heirs, instead of the tax free amount of the first category of €150.000.
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