Tax Treaty Case Law around the Globe 2018

S. 3Chapter 1 Greece: Scope of Application of the Treaty in Case of Income from Unknown Sources

Katerina Perrou

1.1. Introduction

During the period from 2014 until 2017, massive targeted tax audits were carried out by the Greek tax administration concerning years 2010, 2011 and 2012. These audits targeted individuals that had transferred funds from banks in Greece to banks outside Greece between 2010 and 2012. Many disputes arose as a result of these audits, as many taxpayers claimed that the transfers were not of income from unknown sources but normal savings from previous years’ earnings. The decision of the Greek Supreme Administrative Court, Chamber B, number 435/2017, dealt with the issue of the taxation of income of an individual from unknown sources in the context of the Greece-Russia Income and Capital Tax Treaty (2000) (hereinafter Greece-Russia double tax treaty).

The legal issue decided by the Supreme Administrative Court, among other issues that were discussed, was whether the relevant tax treaty would apply where non-residents were found to have acquired income from unknown sources in Greece. The case was referred to the Supreme Administrative Court after an appeal on points o...