After a great deal of campaigning by members of the Greek community, 2023 has been set as a date for Australia’s expansion of its existing network of 45 bilateral tax treaties.
Ten new countries will be added as part of a wider plan aimed at helping to support Australian businesses to recover financially with treaty negotiations underway with India, Luxembourg and Iceland and negotiations scheduled next year for Greece, Portugal and Slovenia. Submissions to help move treaty agreements forward are sought from stakeholders through to 31 October and interested parties are invited to comment on the consultation.
Greek Community of Melbourne President Bill Papastergiadis was delighted with the latest announcement by the Australian Government.
“We have been liaising with the Greek and Australian Governments on finding an equitable solution to the issue of people being taxed twice on any of their investments,” he said.
“We met with (Deputy Treasurer Michael) Sukkar in March 2021 and it is pleasing to receive a letter from Minister Sukkar on behalf of Treasurer (Josh Frydenberg) confirming that Australia and Greece will enter into bilateral tax treaty negotiations in 2022.”
There’s no denying that a treaty would solve problems for a number of Greek Australians being taxed twice, especially those who hope to one day retire in Greece but whose dreams are currently hampered by the fact that this would mean having the same assets taxed twice by both Australia and Greece. Unlike taxpayers from 57 countries with bilateral Double Taxation Agreements with Australia, people with assets in both countries see their rentals and other investments shrink a little more as two tax offices get a slice of the pie.
John Tripidakis, a Greek lawyer practicing in Australia, has been working with the GCM for the pursuit and establishment of the DTA. He welcomed the news for the start of negotiations, stating that the “Greek Australian community has experienced specific unfair tax and legal issues when dealing with the two (different) tax systems simultaneously. These issues have to be specified, analysed and realistic proposals for their remedy need to be suggested.”
Tax lawyer Tony Anamourlis points out that, for the Australian government, putting tax treaties in place is not just to help out your average pensioner or Greek Australian who inherits family property, but about the bigger picture, ie. trade.
For Greece, the advantages are evident.
“Let’s say, Stelios Rokkos comes and performs. He will get taxed here and will get a foreign tax credit. That’s to his benefit because entertainers like him will take a withholding tax of 47 per cent,” Mr Anamourlis told Neos Kosmos.
“Australia has bucket loads of companies and of course Greece would want in, but what can it give in return?” he asked, pointing out the pros and cons for Australian companies wishing to invest in Greece from the advantage of cheap labour to the disadvantage of taxing and currency issues.
“Why would I want to go and invest in Greece where the top tax is 60 cents in the dollar? And 100 euros is around 140 Australian dollars?” he said.
“Greece has to look at tax concessions and look at incentives.”
Greece recently ranked among the Top 10 most attractive Foreign Direct Investment (FDI) destinations in Europe, and hopes to draw Australian capital despite the challenges it has faced as part of its drive to offer opportunities for investment.
Enterprise Greece Executive Director Betty Alexandropoulou showcased Greece’s offerings during an Open Dialogue meeting with Greek Australians, chaired by Australian Chamber of Commerce and Industries Director Paul Nicolaou, where she stated that “such an agreement (as a DTA) would be a positive step in increasing transactions of capital, goods, services and people between our two countries”.
Trade Commissioner Katia Gkikiza has often outlined recent trade trends between Greece and Australia, pointing to the total volume of trade in goods and services in 2020 increasing by 12.5 per cent despite a relative 8.4 per cent with the EU27. Growth has been steady, hitting the 100-million-euro mark in 2010, 150 million euros in 2017 and 200 million euros for the first time in 2020, growing seven per cent despite the pandemic. In the first six months, there has been a 7.1 per cent growth and hints of another fruitful year.
Mr Papastergiadis said, “A treaty between the two countries will have a profound effect on many levels. Firstly, it affects the plans of many Greek Australians who hope to one day retire in Greece without worrying about the treatment of assets from a taxation perspective. More importantly it makes Greek and Australian tax relations on par with over 40 other countries which in turn can only help trade relations. Whilst it is not the only impediment to building on the rather anaemic $330 million of trade between Australia and Greece annually, it can only help but encourage further development. As a matter of context and whilst economies differ greatly, Italian trade with Australia sits at $11.1 billion annually, a significantly higher multiple than the Greek figure.”
For this to happen, Mr Anamourlis points to obstacles which need to overcome, especially bearing in mind that Greece is a member of the EU, hence not a free agent. “The EU dictates at the end of the day what Greeks can or can’t do. They’ve got to go through mechanisms and via EU platforms,” he said.
He adds that once the complexities are hammered, maybe even amnesties granted as people rush to declare assets in both countries, and once the DTA comes into play it will ultimately be drive trade between the two countries.
To help move the treaty agreement forward, submissions from stakeholders are sought through to 31 October 2021. Interested parties are invited to comment on this consultation.Details of Australia’s existing tax treaties are available on the Treasury website. To submit via email: RGCITDTaxTreatiesBranch@TREASURY.GOV.AU, or for written submissions post your letter to: Tax Treaties Branch,Corporate and International Tax Division,Treasury, Langton Cres Parkes ACT 2600.