By the Article 8 of Law 4172/2013, paragraph 3 it is specified that the income tax imposed on the income of each taxpayer, regards income which has been gained during the direct previous tax year (ie. Income tax 2015 levied on the income of the year 2014 and so on).

The income is acquired, according to the explanatory memorandum of the abovementioned law, at the time at which the beneficiary has rendered his services or transferred the ownership of the goods / products and obtained the right to receive the income (on the earned income basis).

These two conditions need to be met cumulatively for the taxation of the income.

These two conditions for the tax years starting from 01.01.2015 and onwards are similar to those which concern the time of issuance of the invoice or retail item (Articles 11 and 13 of Law 4308/2014). In other words, the income is considered to be obtained at that time at which there is an obligation to issue the foreseen documents (invoice or retail component), since at that time the above two conditions are met, the  earned income and the entitlement to receive the income.

An exception to the above is the case, when the foreseen document has been issued within the fiscal year, but the relevant income has not been accrued (eg. entitlement of receiving a service such as in gyms or car breakdown service.) In this case, the relevant income is obtained in the tax year in which it accrues, ie the time the services are provided. Similarly, amounts received in a fiscal year of an advance payment are not considered as income of the tax year in which they were received, but as income of that year which they refer to and in which they are earned.

When no right is obtained to earn for a service provision, which lasts beyond the fiscal year because neither its total nor a part of its delivery has been completed, with the result that there is no obligation to issue the relevant invoice foreseen, the income, which is becoming accrued, is not considered as income of the tax year in which it becomes accounted but of the tax year in which the total or a part of the service is completed and there is an obligation to issue the relevant document / invoice.

Regarding the income from an employment and pension status the following applies:

As acquisition time of this income in each case is considered to be the time, ie the tax year in which the beneficiary acquired the entitlement to earn. Especially for the non received accrued earnings, which are collected from the year 2015 and onwards, the collection creates the obligation to declare those earnings in order to be taxed at that time. In case these are explicitly stated in the annual salary remuneration certificate granted to the beneficiary, they will be subject to tax under the provisions of the year to which they relate. Amending declarations can be submitted for those years without penalties.

For the following categories of income mentioned below, the collection time is defined as follows:

• For income from nationally-sourced dividends, interim dividends, as well as temporary withdrawals of profits, the time of the decision for their distribution approval by the competent organ of the legal person or legal entity.
• For the general partnerships and the limited partnerships, for the participating companies and the joint ventures keeping double-entry books, as acquisition time of the entitlement to earn dividends, is considered to be the last day of the following month of the final deadline for the submission of the income tax return (¹).

For the same above mentioned entities, which keep single entry books, as income acquisition time is considered to be the date of their financial year's closing.  

• Finally, as time at which an income is gained from foreign-sourced dividends, when it is not easy to define the time at which the right for collection has been obtained (eg. decision of the competent body), is considered to be the time of payment to the beneficiary via a bank deposit to the beneficiary's account or otherwise.
• For the nationally-sourced interest income, as the date of acquiring the relevant income is considered to be the date at which it becomes due and payable (²).

For the income from fixed deposit interest, as time of the income obtaining is considered to be the maturity date of the fixed deposit, even for those fixed deposits extending through more than one fiscal years.

• For the interest of foreign origin, as time the income is gained, when it is not easy finding the time at which they become due and payable, is considered to be the time at which the payment has been done to the beneficiary via credit on the beneficiary's bank account.

Especially for the interest from treasury bills of the Greek State, as acquisition time of the earning right, is considered to be the time of the securities issuance, while for the bonds of the Greek State the time of the collection of interest coupons or the maturity time of the bonds, when it comes to zero coupon bonds.

•  Finally, as time of the interest obtaining, which are ordered by virtue of a court decision, is considered to be the time of the issuance of an enforceable court judgment.

(¹) We do not refer at examples with specific dates in order not to cause any confusion because of the continuous changes and extensions on the submission date of these declarations / statements.

(²) In reality, when they are credited to the bank account of the beneficiary.

NOTE: This article does not cover advisory, but only informational purposes, and cannot serve, as a basis for further actions, on the part of   the reader. Reception of specialized advice is required.

Our company does not hold any responsibility for any actions, taken by the readers, based on the present article.