Greece's tax dispute resolution authority has issued a landmark ruling clarifying when inherited financial assets held abroad are exempt from Greek inheritance tax, overturning an assessment against the heir of a woman who left bank deposits in Australia.
The decision by the Directorate for the Resolution of Tax Disputes (DED), an independent body within Greece's tax administration, provides important guidance for Greeks living overseas and their heirs, particularly those with assets spread across multiple jurisdictions.
The case involved the estate of a Greek woman who died in 2022 after spending many years in Australia, where she had accumulated financial assets. She owned property in both Greece and Australia and had drawn up a separate will covering her Australian estate, which consisted exclusively of cash deposits held in an Australian bank. The assets were bequeathed to her husband and children.
ΔΙΑΒΑΣΤΕ ΕΠΙΣΗΣ
One of the heirs declared the Australian bank deposits as exempt from Greek inheritance tax, relying on provisions in Greece's Inheritance Tax Code that exempt movable assets located abroad when the deceased was a Greek citizen who had been permanently established outside Greece for the minimum period required by law.
Rejection from the Greek tax authority
The Greek tax authority rejected the exemption and issued an additional tax assessment, arguing that the exemption did not apply. The heir appealed, maintaining that his mother had lived continuously in Australia for more than 10 years, satisfying the statutory residency requirement. He also argued that the tax authority had failed to adequately justify its decision.
In its ruling, the DED confirmed that Greek law provides an inheritance tax exemption for movable assets located abroad when the legal conditions regarding the deceased's residence overseas are met. It also noted that legislative amendments adopted in recent years apply retroactively to inheritances arising on or after Jan. 1, 2020.
The appeals body further rejected the tax authority's interpretation that heirs must prove the overseas assets were generated through the deceased's economic activity abroad. According to the ruling, no such requirement exists under the law.
The decision relied heavily on documentary evidence submitted by the taxpayer, including the deceased's Australian naturalization certificate, passports, records from Australia's National Archives, sworn affidavits and official documentation from the Australian Border Force. Together, the evidence established that she had lived continuously in Australia for a period well beyond the minimum threshold required under Greek law.
Based on those findings, the DED upheld the appeal, concluding that all legal conditions for the inheritance tax exemption had been satisfied and canceling the additional tax assessment.
The ruling is expected to serve as an important precedent for cross-border inheritance cases involving Greek citizens who spent extended periods living abroad and whose estates include financial assets held outside Greece.
