14 Ways to avoid the imputed-income tax

1) Income from the sale of assets

You may use sums of money which you received during 2017 from the sale of your assets, namely from sales of cars, immovable property, pleasure boats etc. From these amounts, however, you must deduct the expenses you incurred for the acquisition of those assets. Essentially, the right given to you by the Ministry of Finance is to invoke any positive difference between the value at which you acquired an asset and the value at which you sold it!

In cases where you invoke amounts from the sale of assets, you must have available a certified copy of the contract or preliminary agreement or a certificate from the notary from which the sums of money received emerge. For the sale and purchase of vehicles between private individuals, a simple declaration under Law No 1599/1986 by both parties to the transaction is sufficient.

2) Profits from shares and mutual funds

For shares, what you can use to cover imputed income is the capital gain from selling them at a price higher than the acquisition price. If the capital gain arose from the sale of shares listed on the Stock Exchange, you must attach the relevant transaction slips to your tax return. You may also invoke for the purpose of covering imputed income the capital gain arising from the sale of units in mutual funds at a price higher than the purchase price. In that case, you must have available the relevant certificate which the mutual fund management company is obliged to provide you.

3) Interest from REPOS, Treasury bills and Greek Government bonds

If the taxpayer has invested sums of money in repos, Treasury bills or Greek Government bonds, he or she may invoke the interest possibly received during 2017 from these investments in order to justify expenses for the acquisition of assets or imputed living expenses.

4) Interest from deposits

The amounts of interest from bank deposits may be used to cover expenses for the acquisition of assets or imputed living expenses. Deposit interest is taken into account in the calculation of the solidarity levy.

5) Import of money or foreign currency

For the purpose of covering imputed income, account is also taken of the sums of money brought into the country from abroad during 2017 and not compulsorily transferable to the Bank of Greece, provided that their acquisition abroad is justified. To prove these amounts, the original document issued by each bank when money is imported from abroad is required. Among the documents included is the single foreign-exchange purchase certificate. In any case, the document must contain the beneficiary’s full name, the amount imported, the currency and the country of origin.

6) Loans from banks or from relatives

The conclusion of a loan is evidenced by a notarial or private document that has been stamped and bears a certain date for the contracting of the loan. From the date it must be clear that the loan was taken out within 2017 and before the expenditure was made.

7) Gifts or parental benefits of sums of money

The amounts you received during 2017 either as gifts or as parental benefits cover the imputed income. You can prove them provided that you have the relevant certificate from the competent head of the tax office from which it will emerge that the gift or parental benefit was made before 31 December 2017.

8) Severance payments and lump sums from insurance funds

Compensation due to termination of employment relationships and the amounts of lump-sum benefits paid by welfare funds and other insurance organisations may be taken into account for the coverage of deemed expenses. It is proven that these amounts were received on the basis of the certificates that employers, insurance funds and other bodies that paid them must have issued.

9) The amounts that are not considered income

Such amounts are, for example, compensation for an accident. It is proven that these amounts were received on the basis of the certificates that the bodies which paid them must issue.

10) Winnings from lotteries, PROPO, LOTTO, TZOKER and Fixed Odds Betting

Winnings from lotteries and chance games of O.P.A.P. may also be used (LOTTO, Pro-Po etc.) provided that the taxpayer has in his possession the relevant certificate from the Directorate of State Lotteries or O.P.A.P.

11) Savings from previous years

You may use your funds from savings accumulated over previous consecutive years, which you spent in 2017. As expended capital, the Tax Office takes into account the amounts which result after deducting, from the total of taxed or lawfully exempt income as well as other receipts that you included in the declarations of past years:

the amounts of all kinds of expenditure for the acquisition of assets that you had included in the same declarations

the amounts of living expenses, arising from the assets that you had also included in the same declarations, even if you had been exempted from those deemed expenses. In particular, from the income and receipts of the years 2008 and 2009 the amounts of living expenses corresponding to assets for which exemption from the deemed expenses applies are not deducted.

To establish the capital from previous years that you spent in 2017, you must draw up an analytical statement with the amounts of the receipts and the deemed expenses of the previous years, and have available the copies of the relevant tax returns and the corresponding assessment statements.

12) The unemployment benefit of O.A.E.D.

The amounts of this benefit that you may have received within 2017 are taken into account for covering any additional difference between declared income and the sum of objective living expenses and acquisition expenses of assets.

13) The Social Solidarity Income (K.E.A.)

If you are on a low income or unemployed and during 2017 were receiving K.E.A., you are entitled to use the amount of this benefit to cover deemed expenses.

14) The "repatriated capital"

The amounts that were re-introduced into Greece and taxed at 5%, in accordance with the provisions of article 18 of Law 3842/2010 on incentives for the repatriation of capital from abroad, may be used by the taxpayer to cover any additional difference between declared income and the sum of objective living expenses and acquisition expenses of assets.