Greece has recently seen fit to follow in Italy’s footsteps and introduce a new non-dom regime. The scheme was introduced in December 2019 and came into effect on the 1 January 2020.
In order to join the scheme individuals will opt to pay a flat tax of €100 000 pa regardless of the level of their foreign source income. There will be no further liability on non-Greek source income. It does not even have to be declared. There is also no minimum stay requirement, however, it is obvious that this needs to be sufficient to show it is their residence under normal tax rules which may be challenged by other countries. The individuals will, however, qualify as Greek tax residents under Greek tax law and tax resident certificates will be issued to them. Any Greek source income will be taxed as normal in Greece.
The scheme can be extended to other close relatives including grandparents, children etc by paying an additional €20 000 per parson pa. Underage children do not require the payment of additional funds. The scheme can last for up to 15 years and will be terminated in any year that the requirements are not met.
In order to qualify for the scheme, the following conditions need to be met:
preceding 8 tax years;
The individual or a close relative or a legal entity in which he/she owns the majority of the shares, invests in Greek real estate or of a shareholding in a Greek company, for a minimum of €500 000. The investment must be made within 3 years of filing the application.
A new tax system for pensioners has also been introduced. It applies from the 2020 tax year and applies to foreign pension income. If a pensioner moves their tax residence to Greece, the individual will pay a flat rate of tax of 7% on all their global income.
In order to be eligible, the following conditions must be met:
The individual must not have been tax resident for 5 of the previous 6 years;
The individual must transfer their tax residence from a country with which Greece has concluded a tax agreement.
All other Greek sourced income remains taxable in Greece.
New system for employment and business income
A rather interesting and new development is the introduction of a scheme for foreign taxpayers who move to Greece. Their income Tax from employment in Greece will be subject to a 50% deduction which will apply for 7 years. Given that the current marginal rate of tax in Greece is 44% this results in a tax rate of 22% for income over €40 000. This will only apply if they provide employee services in Greece to a Greek legal entity or a permanent establishment of a foreign company.
In order to be eligible, the following criteria must be met:
The applicant should not have been resident in Greece for 7 out of the past 8 years;
The applicant should be transferring residence form an EU or EEA member state or from a state with which Greece has concluded a tax agreement;
The applicant confirms that he/she will reside in Greece for at last 2 years.