Tax residence in Greece

Greece is an amazing country to live and invest in – and several special tax provisions that were put in place in recent years may make it possible for several categories of individuals to do this, in the most financially attractive way.

Greek legislation has introduced several noteworthy tax incentives for the transfer of tax residence in our country, which are deemed highly appealing by foreign nationals and Greeks who left the country in recent years due to the economic crisis. These incentives, which were introduced to attract foreign capital, make it more attractive for individuals wishing to invest in Greece and make it the centre of their business activities.

More specifically, since 2019, two special tax regimes have been set up, with the aim of encouraging individuals to transfer their tax residence to Greece:

High Net Worth Individual (HNWI) Regime

Similar to Non-dom regimes, this was introduced with a mind to attract high net worth foreign individuals and expatriate investors, by providing an alternative way for taxing income generated outside the Greek territory. It applies to individuals who choose to transfer their tax residence to Greece, offering them the opportunity to be taxed in our country for income derived from foreign activities, with a fixed annual tax of EUR 100,000, for a maximum of 15 fiscal years.

Various conditions apply for eligibility, including that said individuals must not have been Greek tax residents for the previous seven of the eight years prior to the transfer of their tax residence to Greece, and that it can be proved that either themselves, a legal entity in which they hold the majority of the shares or their relatives (meaning their spouses and those in the ascending or descending line) can invest at least EUR 500,000 in real estate, businesses, or transferable securities or shares in legal entities based in Greece.

Moreover, it is worth noting that, under this regime, there is a possibility to request its extension to any family member willing to transfer their tax residence to Greece, for a fixed additional annual tax of EUR 20,000 per additional family member. Moreover, individuals opting for this regime are exempted from taxes on gifts, inheritance, and parental donations.

It is also important to point out that this is especially attractive for individuals who have assets and business activities in various countries across the world: as there is no requirement for physical presence in Greece, they are free to choose their actual place of residence, and still enjoy the benefits of choosing our country as their tax residence.

Foreign Pensioners Regime

In a similar effort to attract foreign pensioners in particular, the alternative taxation regime on foreign source income earned by individuals choosing to transfer their tax residence to Greece was also extended to those of them wishing to do so. More specifically, recently enacted provisions offer foreign pensioners the option to take advantage of the alternative taxation of their total foreign source income.

Eligible individuals must, not have been Greek tax residents for the previous five of the six years prior to the transfer of their tax residence to Greece, while they must also transfer their tax residence from a state with which an agreement on administrative cooperation in the field of taxation with Greece is in force.

In view of the above, those pensioners whose application will be accepted under this regime will pay a specific, individualized annual tax at a rate of 7% on all income earned abroad. Pensioners can elect to remain under this regime for a maximum of 15 years, with the possibility to withdraw from it anytime they choose to do so. The tax will have to be paid each tax year in one instalment until the last working day of July and cannot be offset against other tax liabilities or any credit balances. Quite importantly, the payment of this low-rate tax will exhaust any tax liability on the income in question.

Application Deadlines

Individuals wishing to take advantage of the High Net Worth Individual Regime need to file a relevant application for the transfer of their tax residence and for obtaining Non-dom status at the latest by 31 March at the non-resident’s tax office. This must be accompanied by proof of transfer of the minimum investment amount required in an account of a bank established in Greece. The remaining supporting documents must be submitted by May.

Those wishing to enjoy the benefits of the Foreign Pensioners Regime will also have to file their application for the tax residence transfer and submission to this regime by 31 March of the respective tax year.

The Greek Tax Administration assesses applications and issues its decisions, either approving or rejecting the application in question, up until the last working day of the month of June for High Net Worth Individuals and within 60 days for foreign pensioners, within the year of the submission of the application.

Foreign Individuals Wishing to Work in Greece

Special provisions were also put in place to attract foreign individuals to work or undertake personal business activities in Greece by offering them an appealing regime of alternative taxation, as of tax year 2021.

Under this special regime, which applies to employment income and business activity rendered in Greece, individuals who choose to transfer their tax residence to our country will be eligible for both income tax and solidarity contribution exemption on 50% of their employment and/or business activity income derived in Greece, on any given tax year.

The relevant application must be filed upon arrival of the interested party in Greece either within the same tax year or by the end of the next year. More specifically In cases where the interested individual commences employment or business activity at the latest by 2 July 2023, their application will be reviewed for the respective tax year; if the date of commencement is later than 2 July, the application will be considered for the following year.

The Greek Tax Administration assesses applications and issues its decisions, either approving or rejecting the application in question, within sixty (60) days of the filing of the application.

It must be noted that the above provisions on alternative taxation apply in respect of the income of the tax year for which an individual’s application is filed and shall expire after a total of seven tax years, without the possibility of further extension.

At Ecovis Hellas Ltd. we have extensive experience and expertise in all aspects of personal and business taxation and regularly advise both businesses and private clients on matters concerning their tax status and related options.

If you are thinking about transferring your tax residence to Greece and taking advantage of the many benefits this may offer you, contact us today at athenstax@ecovis.gr to set up an appointment and find out how we can help you make it happen.