The past few years has seen Greece mired in a deep financial crisis that was made even worse by the global Covid-19 pandemic. The Greek government realized that by attracting new foreign investors to the country with a tax incentive program, similar to the Portuguese NHR and the Italian flat-tax rate, Greece’s economic situation would improve.
In 2020, the Greek government launched a tax incentive program called “Tax reform with a development prospect for Greece’s future” that would attract high net worth individuals and retirees to invest in Greece and spend most of their time in Greece.
- A 7% flat tax rate on all foreign income for foreign retirees who move to Greece that include investments, pensions, rental income, business activities, dividends and other forms of income that is valid for 10 years.
- A flat tax of €100,000 for high net worth individuals
Requirements needed to avail of tax incentive program for foreign retirees
- Applicants must earn a pension income from a foreign source
- Applicants must transfer their tax residence to Greece
- Applicants must not have been a tax resident in Greece for five of the last 6 years before application
- Applicants must show pension status
- Applicant must agree to live in Greece for at least six months a year
- Applicant must be from a country that has a Double Taxation Agreement (DTA) with Greece
What is the double taxation agreement or DTA?
This is an agreement that Greece has with various countries all over the world that:
- Prevents individuals from being taxed on the same income in two countries
- The foreign sourced income of a foreign resident in Greece will not be taxed
How will pensions be taxed?
- Annual flat rate of 7% on pensions and withdrawals from non-Greek private pension
- Annual flat rate of 7% on foreign income like dividends, interest and capital gains.
- Tax credits and deductions for international double taxation will be applied against the above 7% if tax is paid at source.
- The applicant will be taxed on his/her Greek personal income tax for all Greek source income under the general tax rules (with a progressive rate of up to 44%).
- The scheme may last up to 15 years which is a longer period than the Portuguese or Italian schemes.
- Applicants are not exempted from Greek inheritance tax nor from Greek gift tax for movable property located abroad.
- Application is not extended to family members.
Requirements needed to avail of tax incentives for high net worth individuals
Income earned abroad by high net worth individuals and /or their family members who transfer their tax residence to Greece will be exempt from taxation to the extent that a flat rate of €100,000 is paid.
- The high net worth individual and/or his/her family members has not been a Greek tax resident for 7 out of 8 years prior to the transfer of his/her tax residence to Greece
- The applicant and/or his/her family members or company where applicant is the majority shareholder must show proof of investment in real estate or moveable property or shares in legal entities based in Greece
- The amount of the investment must not be less than €500,000 and must be made within a period of 3 years
- The above requirement is not necessary if the applicant has already obtained a residence permit by investment in Greece or through the Greek Golden Visa
How will high net worth individuals be taxed?
- High net worth individuals will have to pay a tax or flat rate of €100,000 per year, regardless of the level of their foreign-sourced income
- Family members covered by the tax incentive must pay a flat tax rate of €20,000 per year
- The flat tax rate of €100,000 cannot be reduced by double taxation relief or tax credits
- Applicant will be exempt from Greek inheritance and gift tax in respect of any property abroad
- The tax regime will be valid for a have a maximum period of 15 years
- Income from Greek sources must be declared in the annual personal income tax return and will be taxed in accordance with Greek personal income tax
Greek Golden Visa
Greek residency may be easily attainable through the Greek Golden Visa program that requires an investment in real estate of only €250,000 and no residency requirements. The Greek Golden Visa is one of Europe’s most popular residency programs.
Greece has many different real estate options from residential apartment to luxury villas for investment or as a second home in Athens or in any of the many islands.
Benefits of the Greek Golden Visa:
- Residency is processed in 60 days
- Right to live and work in Greece
- The whole family is eligible for the program
- Visa-free travel to the Schengen area
- No need to live in Greece