Opening Or Updating A Bank Account In Greece

Opening Or Updating A Bank Account In Greece By Christos ILIOPOULOS* Athens, 16 October 2021 Banks in Greece the last few years have been applying considerably more strict rules with regard to keeping updated and accurate records of the identity and of the personal data of their clients. The financial institutions feel the pressure of the regulating authorities (the Bank of Greece, Ministry of Finance, the institutions of the European Union.), to clean up their act not only regarding the thousands of “red” loans which are not being serviced, but also with regard to more transparency in banking transactions. As a result, opening a bank account in Greece requires the proper identification of the client and meticulous recording of his/her personal data, meaning address, phone number, profession, tax status etc. If the person who wants to open a new account or update an existing one is a foreign resident, the bank will request a number of supporting documents as evidence of the personal data of the client. These documents are the Greek id card or Greek or foreign passport of the client, a copy of the client’s recent telephone bill to confirm his/her address and telephone number, a copy of a recent electricity bill to double check the client’s address, and a copy of the last tax assessment or tax records from the country where the client is a permanent tax resident. The bank in Greece is not interested in the income of the foreign resident, but wants to be certain about the fact that this person is a foreign tax resident and of which country in particular. Another document the bank wants for the opening or for the update of a bank account is proof of the client’s profession. This is provided either with a letter from the company or agency where the client works, stating that this person works for this company or authority, or a copy of the client’s professional identity card or proof of membership to any professional chamber. If the client is retired, proof of profession many not be needed. The client must file the above documents in person at the bank in Greece. The bank will take a sample of the new client’s signature, if the matter at hand is the opening of a new account. If the issue is the update or re-activation of a previously existing account, the bank will require all the above documents filed in person by the client, in order to obtain fresh and accurate information about the client’s profile, in case the bank wants to audit anything regarding this client’s banking activity. Alternatively, the opening or update of an account can be done with a power of attorney (POA), which the client signs at the Greek Consulate at the country of his residence or at a notary public with either the Apostille stamp or certification by the Greek Consulate (if the country of his residence has not ratified the Hague Convention for the Apostille). The text of the POA must be very detailed and accurate and for this reason it must be prepared by an attorney in Greece, who will have first discussed in detail with the client and then will have agreed with the bank regarding the bank’s demands. The opening of the bank account will, however, require, even at a later point, the physical presence of the client in Greece, to give the sample of his signature, while the update of the account can be done exclusively with the POA. Finally, if the new client of the bank is to wire significant funds to Greece from abroad, the Greek bank will require written evidence from the foreign banks showing that these funds have either been acquired recently by the disposition of an asset of the client, or that the funds had been in the client’s foreign bank account for a minimum period of time. . *Christos ILIOPOULOS, attorney at the Supreme Court of Greece , LL.M. www.greekadvocate.eu e-mail: bm-bioxoi@otenet.gr

Zero Transfer Tax For Parental Gifts In Greece

Zero Transfer Tax For Parental Gifts In Greece By Christos ILIOPOULOS* Athens, 6 October 2021 From 1st October 2021 a major tax break has been introduced by the Greek government. Parents who wish to transfer to their children any type of asset, including real estate, cash, company stakes, will not pay transfer tax for gifting property worth up to 800,000 euros. The tax – free parental gift of 800,000 euros applies to each parent gifting property to each child. In other words, the two parents can gift property to their two children worth up to 3.2 million euros (800,000 X 4) without any transfer tax, since each parent can gift to two children property worth up to 1.6 million euros tax - free. The same applies vice versa, for gifts from children to parents, although such transfer is rare. Given the value of properties held by the average Greek household, which is less than 800,000 euros, the new tax - free amounts will cover virtually every family in Greece. The previous tax - free amount was 150,000 euros, which makes the new tax - free limit of 800,000 euros look like an extraordinary measure. Up to now, the tax – free limit for the parental gift was the same as the tax – free limit for acceptance of estate (inheritance). In both cases, the amount was 150,000 euros. From 1st October 2021, the tax – free limit for the parental gift is skyrocketing to 800,000 euros, while the tax – free limit for the inheritance remains at 150,000 euros. This suggests that the usual question for a parent, whether it is better to give assets to the children now with a parental gift, or leave them for after the passing of the parents, the answer is that, tax wise it is preferable to gift assets to the children now, since the tax – free limit is very high (800,000 euros), compared to the 150,000 tax – free for the estates. The tax – free limit applies also to free gift transfers from children to parents. Therefore, with the new law, after 1st October 2021, even siblings can transfer between themselves assets or cash, up to 800,000 euros, without paying any transfer tax. This can be achieved if the child gifts first to the parent the asset or the cash and subsequently the parent can further gift it to the other child. Even grandparents can transfer assets or cash to grandchildren, without paying any transfer tax up to the amount of 800,000 euros. With regards to cash transfers, however, there is a catch. Any free gift from parent to child or from child to parent or between grandparent and grandchild, must be executed through the bank. Consequently, the amount which will be gifted must exist in the bank account of the person who makes the gift and must be transferred through a bank transaction to the account of the person who receives the cash gift. Moreover, the additional precondition is that the person who makes the cash gift must have declared the amount as income during the last several years. The higher the amount to be gifted, the more likely the Greek tax authority to enquire whether the person who makes the gift has sufficient income tax filings the last many years, in order to justify the acquisition of such funds. Another way to justify the source of the funds to be gifted, is the sale of assets the previous years by the person who makes the free gift. The free gifting of real estate assets in Greece is done through a deed of free gift, called “goniki parochi”, drafted usually by lawyers and executed before a notary. The deed subsequently must be registered at the local land registry, which will make the deed valid before any third party. If the free gist involves cash / funds at the bank, the two parties sign and file tax declarations to the tax office. *Christos ILIOPOULOS, attorney at the Supreme Court of Greece , LL.M. www.greekadvocate.eu e-mail: bm-bioxoi@otenet.gr