For decades, Trusts have occupied a peripheral position within the Greek legal order. While widely used in common law jurisdictions as core instruments of succession planning, asset protection and wealth structuring, trusts remain institutionally foreign to Greek private law.
Recent regulatory developments signal a discernible shift toward a more integrated and predictable approach. Several steps have been made towards the clarification of how foreign Trusts connected to Greece are assessed, taxed and administered in practice.
This article outlines the current framework and highlights the considerations that internationally connected families, trustees and advisers should now weigh with care. For families and fiduciaries operating across legal traditions, these developments affect not only tax outcomes, but also long-held assumptions about control, exposure and succession planning.
A STRUCTURAL DISCONNECT BETWEEN TRUSTS AND GREEK LAW
In general terms, a trust is a fiduciary arrangement under which assets are transferred to a trustee to be managed for the benefit of designated beneficiaries. While familiar in common law systems, this construct remains institutionally foreign to Greek private law. Trusts may be revocable or irrevocable and may be established either during the Settlor’s lifetime (inter vivos) or by will (testamentary trusts).
Greek private law does not recognize this Anglo-Saxon fiduciary construct, as a domestic legal institution. Trusts have no legal personality under Greek law.
FROM FRAGMENTATION TO FRAMEWORK: THE ROLE OF TAX LAW
Historically, this absence of recognition resulted in Trusts being regulated only indirectly and often inconsistently, creating uncertainty for Settlors, Trustees and Beneficiaries alike.
A turning point came the enactment of the Greek Income Tax Code in 2014, subsequently reinforced by a 2017 interpretative Circular issued by the Independent Authority for Public Revenue (AADE).[1]
Despite their lack of legal personality under Greek civil law, for tax reasons, foreign Trusts are considered to be legal entities.
Although not amounting to formal recognition of Trusts, a more structured approach to their fiscal treatment was established.
TAXATION OF TRUST INCOME
Under the current regime, income generated by a Trust is, in principle, taxed in a manner analogous to that of a legal entity.
Where a trust is not domiciled in Greece, income generated in Greece is taxable under Greek law, as long as no Convention for avoidance of double taxation between Greece and the country where the Trust is established provides otherwise.
For internationally structured families, this shift away from the 2014 regime often produces outcomes that diverge from common law expectations, particularly where income attribution and control are assumed to align.
SETTLOR CONTRIBUTIONS AND DISTRIBUTIONS
Assets transferred by the Settlor into trust are not treated as a donation to the Trustee and do not trigger donation tax.
Distributions, however, are assessed by reference to the capacity in which they are received. Distributions to the Settlor acting as settlor, are taxed in a manner comparable to the liquidation of any legal entity. Where the Settlor is also a beneficiary, distributions may be characterized as a return on capital initially contributed and assimilated to dividends for tax purposes.
In certain structures, Controlled Foreign Companies (CFCs) rules may apply, particularly where interrelated entities operate across jurisdictions. Where applicable, these rules can significantly alter the anticipated tax profile of a trust, underscoring the importance of periodic reassessment rather than reliance on initial structuring assumptions. In such cases, the tax outcome may diverge materially from initial expectations.
BENEFICIARIES AND TRANSFER TAXES
Distributions to Beneficiaries are taxed under Greek inheritance or donation tax rules, depending on whether the Trust is testamentary or inter vivos.[2] In any case, inheritance or donation tax is imposed on the Beneficiaries of the inherited or donated property provided it is taxed in Greece.
Regarding the calculation of tax due, Beneficiaries are classified into three categories according to their degree of kinship with the Settlor, a factor that directly affects applicable rates and exemptions. For internationally structured families, these classifications can produce outcomes materially at odds with common law trust assumptions.
TRUSTEES: LIMITED EXPOSURE AND ONGOING COMPLIANCE
Trustees are not taxed on trust income generated in Greece in their fiduciary capacity. Their tax exposure is limited to any remuneration received, provided they are Greek tax residents, unless an applicable double taxation treaty provides otherwise.
In practice, trustee residence and characterisation of payments remain areas requiring careful monitoring.
SPECIAL REAL ESTATE TAX AND TRUST STRUCTURES
A development of particular importance for real estate-holding trusts concerns the application of Greece’s 15% Special Real Estate Tax (SRET).
SRET is a special anti-tax avoidance rule which applies annually at a rate of 15% and is assessed on the value of the properties being held as on 1st January of each year, unless one of the statutory exemptions applies.
The availability of the disclosure-based exemption for trusts has long been controversial, largely due to the distinction between legal ownership (trustee) and beneficial ownership (beneficiaries).
As of recent decisions issued by the Independent Authority for Public Revenue, disclosure exemption from the 15% Special Real Estate Tax is extended to trusts holding shares in companies owning Greek real estate, provided that specific conditions are cumulatively satisfied.[3]
Overall, extending SRET exemption eligibility to trusts marks a significant development, particularly for individuals seeking to invest in Greek real estate through trust structures. This development reduces, but does not eliminate, the need for careful structuring and disclosure analysis.
CONCLUSION
Trusts may not be recognised under Greek private law, but their economic and fiscal footprint is increasingly visible. For families operating across legal traditions, trusts touching Greece must be approached as evolving structures shaped by tax law, administrative practice and cross-border enforcement. Strategic foresight and periodic reassessment are essential to ensuring that trust arrangements remain aligned with both intention and outcome.
SKANDAMIS AVOCATS regularly advises high-net-worth individuals, trustees and fiduciaries on the interaction between trust structures, tax law and cross-border succession and real estate planning, with a focus on clarity, discretion and long-term resilience.
[1] Circular no 1114/24-7-2017 of the Independent Authority for Public Revenue (“AADE”).
[2] In accordance with the provisions of Law No. 2961/2001 (Tax Code on Donations and Inheritance), as amended and currently in force pursuant to Law No. 5219/2025.
[3] Decision Α. 1089/2023 amending the Decision A. 1206/2020 of the Independent Authority for Public Revenue (“AADE”).
