Under the Double Taxation Agreement (DTA), international treaties are concluded to avoid double taxation between two states. The DTA regulates the extent of the contracting states’ right to tax income earned in their territory. The DTA is intended to prevent natural and legal persons who earn income in both states from being taxed twice for the same income in both states. Four principles generally apply to the various Double Taxation Agreements (DTAs):
- The Principle of Residence: According to this, a person is liable to tax in the state where they have their domicile or habitual residence.
- The Principle of Source: According to this, a person is liable to tax in the state from which their income originates.
- The Principle of Worldwide Income: The taxpayer is taxed on their entire worldwide income.
- Principle of Territoriality: The taxpayer is assessed only on the income they have earned within the territory of the state concerned.
Greece has concluded such Double Taxation Agreements with several countries. The DTAs between Greece and Germany, as well as between Greece and Austria, are presented below.
The Double Taxation Agreement DTA Germany – Greece