Decision on the separate tax return for married couples living in different countries established for the first time

Based on the decision of the Council of State


The institution of “marital cohabitation” has historically existed in Greece (i.e. the, by definition, common cohabitation of spouses following their marriage), and as a result thereof the submission of the “joint tax return” for all married couples (either with religious or civil marriage). As a result, the wife practically appears together with her husband in the tax return and their Tax Registration Numbers are combined under a common tax office, that of the husband , even if they are two different Tax Offices, based on the place of residence of the spouses.

The only way for someone to be able not to submit a joint tax return was only the conclusion of the recently designated civil partnership (par.4 ar.67, L.4172 / 2013), based on which the two tax payers are  not required to opt for a joint tax return, although this practice is not widespread in our country.

The fact of the compulsory joint tax return has occasionally led to significant consequences, the most characteristic of which is the difficulty (up to the prohibition) of change of tax residence of either spouse, residing abroad while the second remains in Greece.

However, the Council of State since the day of the publication of the decision. No. 1445/2016, radically affects the situation in the above mentioned institution, setting for the first time a solid foundation for the transition from the entirely joint tax return to a separate tax return, upon demonstration of a  different tax residence of one of the two conjugates.

Legal foundation

Article 4 of L.4172 / 2013 defines the tax residence of a person, creating the bases of understanding of this concept, namely:

“1. An individual is a tax resident of Greece, provided that”:

  1. a) has his/her permanent or principal or habitual residence in Greece or the centre of his/her vital interests , that is his personal or economic or social ties or
  2. b) is consular, diplomatic or public official of a similar scheme or a civil servant who has a Greek nationality and works abroad.

The term “vital interests” is consistent with the location as being of mainly family interests, including of course any industrial, commercial, insurance interests.

Therefore, judging from this expression, one realizes that when in a married couple one is left behind in Greece, the family interests remain at the same time in Greece. As a result, the spouse who migrates cannot change the tax residence if not followed by his/her spouse, thus being trapped in the above mentioned legal concept and practice.

Indeed, this has created many social and family problems given the fact that in order for citizens to register their residence and tax residence, they had to separate and get a divorce, so as to separate initially their Tax Registration Numbers  and then their tax residences.

Apparently, one of those people who had in fact exhausted all non-judicial means before the competent tax office where he was registered appealed to the Council of State via the rapid process of a “pilot trial” (being actually a case involving and representing many thousands of our fellow citizens) seeking annulment of the negative decision of the Head of the Income Tax Department of this Tax Office, demonstrating by all appropriate means, gathering all the supporting documents mentioned by the L.4172 / 2013 and Circ. No. 1058/2015 and 1177/2014, stating that only his tax residence is in Germany while his wife remains in Greece, working as a civil servant.

On the grounds of this decision, the Council of State went one step further from the strict interpretation according to the above mentioned provisions of “vital interests”, which essentially created a problematic situation before the competent tax offices. In particular, the decision states that: “Based on the viewpoint in question,  any restrictions arising from the technical settings and features of the system of electronic submission of income tax returns are considered irrelevant-in the sense that it does not entail obligation to submit a joint tax return-, based on paragraph 1 of Article 67 (non-prediction in this system of the possibility of only one spouse filing a tax return when the other is not a tax resident of Greece), because this system should instead be adapted to the rules of tax law and serve the needs  of its correct application and the application of tax legislation should not be adapted to the capabilities of the system.”

Moreover, as the Council of State continues: “Given that the establishment of the tax sovereignty of a state presupposes the existence of sufficient taxable connective element of the tax resident…In particular, based on the OECD Convention (Art.4) it is provided in the event that a natural person is subject according to each Contracting State in full taxation therein and thus is a resident of both Contracting States, that he or she is only considered a resident of the state which has -in the formulation of the above mentioned standard in the OECD’s working languages, -permanent home available to him / foyer d ‘habitation permanent- i.e. permanent residence. If such does not exist it has such in both countries, he or she is subsequently considered a resident of the State with which he/she maintains the closest personal and economic relations (center of vital interests / closer personal and economic relations-center of vital interests / liens personnels et economiques les plus etroits-centre des interets vitaux)”.

Finally, it concludes stating that: “Under Article 4 paragraph 1 of N.4172 / 2013, the center of the vital interests of an individual is where the person develops the personal, economic and social ties. Besides, in order to decide if a person has his residence (or much less  can alter his  long maintained residence) all relevant factors must be taken into account  (Cf. Council of State 1948/1956, Council of State 3870/2002, Council of State 3973/2005, Council of State 1113/2008, Council of State 259/2011 etc), in particular housing, the physical presence of the person concerned, of the members of his family (where namely only his or her spouse and children), the place of exercise of professional activities, the place where his/her property interests are, the place of administrative links with public authorities and institutions (insurance, professional, social), the place of development of political, cultural or other activities.

Conclusions and Implications

The Council of State concludes that “based on the general social and moral views of the time and depending on the socioeconomic standards of the spouses, their separate residence is conceivable (…), if a married individual is not obligated to submit an income tax return in Greece, on the grounds that his or her fiscal residence is not in Greece, in any case there is no question of submitting a joint income tax return, according to article 67, paragraph 4, of L.4172 / 2013, with his / wife, solely because his / her spouse meets the criteria under Article 4 Paragraph 1 of the above mentioned Law to be qualified as a  tax resident in Greece, regardless of whether the obligation to submit a joint tax return complies with the provisions of the overriding legislative powers  or not.

Moreover, based on the considered view, any restrictions emerging from the technical settings and features of the system in the same paragraph 1 of Article 67 of electronic submission of income tax returns are irrelevant, in the sense that it does not entail obligation to submit a joint return because this system should instead be adapted to the rules of tax law and serve the needs of the correct application and not the application of tax legislation adapted to the capabilities of the system. “

Based on the above, the following conclusions should be drawn:

– The mere fact of residence of his / her spouse in Greece cannot act as a deterrent to the process of change of tax residence of the spouse, hence proving in practice his/her residence and tax domicile abroad,

– All the facts in the life of the spouse residing abroad must be examined and analyzed, in order to determine which is the country of tax residence, as described under the broad mantle of “close links”, namely: housing, insurance agents, work, other social activities etc., which ultimately outweigh the mere presence of the other spouse in Greece and consent to the successful change of tax residence of the former,

– The tax authorities’ electronic system  (TAXISNET) must comply with the above mentioned requirements of tax legislation, which are considered as evident to most of us and thus allow the spouses to submit a separate tax return when a similar tax case is presented,

–  The study and analysis of each case of change of tax residence  should be made before the competent tax authorities of the country with absolute respect to its uniqueness, as well as in conjunction with international law, in particular in conjunction with the corresponding Double Taxation Conventions. As a result, any negative decision to be issued will be considered as the last resort and must always be accompanied by an adequate and reasoned decision of the competent Tax Office.  Therefore, it appears that the concept of the study of any request for change of tax residence within the narrow limits of interpretation of the occasionally issued Circular Numbers alone is not consistent with what was formulated and is absolutely wrong.

– Following the above decision “Pandora’s box” is effectively opened for many similar cases which were  rejected by the tax authority,  leading to the result of his/her husband who resides abroad not being able to change residence for tax purposes, and on the other hand being obliged by means of the interpretation that existed before  all this time to declare in Greece his global income.

– Therefore, it is given the right to all these cases to apply for their revaluation, and if it is proved that the tax residence of the spouses is different, to request the return of undue income in Greece for the years that should be taxed only abroad.


It is a fact that from the date of publication of this decision of the Council of State a huge number of unofficial rumors has spread on the interpretation of its reasoning. Consequently, hasty conclusions are drawn, which state that the taxation of income from work abroad will be taxed only abroad. This alone is entirely wrong, because there is no reference to the necessary conditions for this to happen.

The decision clearly invokes the issue of spouses who have a different tax residence and thus work in different countries. In this case and only and provided that sufficient proof of residence and taxation abroad the above conclusion can be drawn regarding taxation abroad. Otherwise, it cannot be stated that an individual who simply rents a house abroad but works and lives in Greece can be taxed abroad.

Therefore, a great deal of attention needs to be paid to the correct interpretation and hence implementation of ‘Landmark-Decision ” of the Council of State, which radically changes the lives of married couples who strive to succeed economically while being apart.

What remains to be done now (taking into consideration that the decision of the Council of State , albeit through a “pilot trial” cannot be applied directly to the respective Tax Authority), is to issue the necessary circulars and / or instructions from the Ministry of Finance, harmonizing the electronic system with the tax law, as defined in the above mentioned decision. This practically means installing the possibility of submitting a separate tax return for married couples in the TAXISNET system, as discussed above.


TaxExperts Team

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