For the first time, the Greek government has put in place tax incentives targeting foreign taxpayers who are willing to transfer their tax residence in Greece. These new incentives may also help to address post-Brexit immigration concerns as well as potential upcoming increase of income tax in the US. The new alternative tax regimes are worth considering as favourable tax treatment is offered to:
a) pensioners wishing to benefit from the country’s renown attraction points -sun, sea, islands-, and
b) high-net-worth individuals wishing to invest in Greece.
The new pensioners income tax regime was introduced in July 2020 and further guidelines were issued in September 2020 by Ministerial Decision A.1217-29.2020. In accordance with this Decision, individuals receiving retirement income abroad who are willing to redomiciliate in any part of Greece shall pay an annual 7% flat tax on all foreign earned income.
As far as investors are concerned, the Greek government introduced the “non-dom” regime with law 4646/2019 in order to attract foreign taxpayers who make significant investments in Greece. Foreign tax residents (acting either as an individual or through a legal entity in which the individual holds the majority of shares) who make an investment anywhere in Greece of a minimum of EUR 500k within a 3-year period can benefit of an annual flat income tax of EUR 100k on all foreign source income.
The investment can be made either in real estate located in Greece, companies with registered office in Greece, or securities issued by companies registered in Greece. With the “non-dom” regime, the new redomiciled foreign individual shall pay additionally EUR 20K per year per spouse/child or parent redomiciled and shall benefit from no inherence/ gift tax on assets located outside Greece. The maximum duration of this alternative tax regime is 15 years.
Up until today, it seems that most investments made by foreign investors have been in real estate. In fact, this type of investment has become more and more attractive as the Greek government recently introduced several new measures favourable to the real estate market such as the gradual reduction of property tax, the freezing of capital gains tax and the reduction of tax on renovations of properties.
Applications for any interested individual qualifying for either of the above alternative income tax regimes are to be filed by March 31stof each calendar year.
I remain at your disposal to assist you and consider whether the particular characteristics of each individual case fulfil the requirements for qualification under either of the two alternative tax regimes mentioned above.
Marylise Takvorian, LL.M.
Family Office Legal 