Through my articles in the international press such as the one below, I attempt to inform and encourage natural persons and investors to move to Greece for tax purposes, contributing as much as I can to a gesture that may enhance the Greek economy.
It is no secret that Greece is a beautiful country with a rich history, stunning scenery, and delicious cuisine. However, by making leaps and bounds, the New Democracy Government has managed to enact a series of tax measures – incentives rendering the country an important destination for repatriated nationals, particularly wealthy aliens but also Foreign Direct Investment.
More specifically, the tax measures enacted by New Democracy in the last four years, giving new impetus to our country’s economic performance, are as follows:
Tax exemption for seven (7) years
Natural persons who transfer their tax residence to Greece can benefit from a 50% tax exemption on their worldwide income for the first seven (7) years. This means that only 50% of their income will be subject to Greek tax, while the remaining 50% will be exempt. Specifically, according to Article 5Γ of the Income Tax Code, as amended by Article 40 par. 1 of L. 4758/2020, the taxpayer, a natural person, who transfers his tax residence to Greece is exempt from income tax and from the special solidarity contribution of article 43A for fifty percent (50%) of his income from employment earned in Greece, if cumulatively:
He was not a tax resident of Greece in the previous five (5) of the six (6) years prior to the transfer of his tax residence to Greece, he transfers his tax residence from a Member State of the EU or the EEA or from a State with which an administrative cooperation agreement in the field of taxation with Greece is in force, provides services in Greece in the context of an employment relationship within the meaning of par. 2 of article 12 of the Income Tax Code (in Greek KΦΕ), exercised either in a domestic legal person or legal entity or in a permanent establishment of a foreign enterprise in Greece and declares that he will remain in Greece for at least two years.
Tax Incentives to Investors – “Non Dom”
In addition to the tax exemption, Greece also offers tax incentives to individuals who invest in certain sectors of the economy. Thus, investors who invest, for example, in renewable energy projects can benefit from reduced tax rates, tax exemptions, etc. This is the institution of the “Non Domiciled Resident” (Non-Dom) introduced in Greece by L. 4646/2019 and regulated in Article 5A of the Income Tax Code. Specifically for investors who choose to transfer their tax residence to Greece, it is foreseen that they will pay a flat tax of 100.000 euros per year for 15 years on their income earned abroad, regardless of the amount of income.
Alternative Taxation of Foreign Pensioners – Application of a 7% Tax Rate
Furthermore, tax incentives to attract foreign individuals are offered to pensioners who wish to transfer their tax residence to Greece. In fact, according to Article 5B of the Income Tax Code, foreign pensioners who transfer their tax residence to Greece are subject to an alternative income tax treatment with a rate of only 7% for income of foreign origin. According to the statistics, 335 applications for this category of 335 applications for alternative taxation from at least 21 countries have been approved from 2020, while 120 applications are currently being processed.
Access to the EU Single Market
By becoming a tax resident in Greece, a person has the possibility to gain access to the European Union (EU) single market. This means that the individual may well benefit from the free movement of goods, services, capital and persons within the EU, which implies a significant impact on their business activities.
Low cost of living
Compared to other European countries, the cost of living in Greece is relatively low. This means that individuals who become tax residents in Greece can enjoy a high standard of living at a significantly lower cost than in other countries.
In addition, according to an article published by the Greek website “moneyreview. gr” in January 2023, transferring tax residence to Greece is becoming increasingly popular among employees, self-employed, pensioners and investors, as it is accompanied by a favourable tax regime.
It should be noted that up to date, 4.500 people, most of whom left the country during the crisis, have returned and are now working in Greece. In fact, 1,500 new applications are currently being examined. Under this special scheme to which they are subject, they will pay 50% of their tax liability for the next seven years.
According to data from the Ministry of Finance, the number of employees who have decided to come to Greece thanks to this particularly favourable legislative framework has quadrupled since June 2022, while thousands of applications are pending.
In addition, the number of high-net-worth investors (“HNWI”) who have come to Greece is 124 and within the next three (3) years they will have completed their investments worth a total of 62 million euros.
It is redundant to state that a number of them have already transferred their tax residence to Greece and have started the process of establishing Special Purpose Family Asset Management Companies (in Greek «ΕΕΔΣΟΠ»). In this regard, reference is made to L. 4778/2021, which, with the aim of attracting financial flows of high-net-worth individuals, governs the operation of so-called “family offices”, the establishment of which is conditional on the establishment of a “family office”, which is subject to the condition of incurring operating expenses in Greece of at least 1.000.000 euros per year in each tax year. Indeed, very recently an investor transferred his tax residence to Greece and managed to establish the first Special Purpose Vehicle for the Management of Family Property.
In response to the above, it is clear that in Greece over the last four years the enactment of a series of tax incentives successfully targeted at attracting foreign capital has managed to realistically boost the growth of the domestic economy, to give prestige to our country by dynamically integrating it into the international destinations for foreign capital and to leave, hopefully irretrievably, the utopian wishful thinking of previous governments in the past.
Article written by Christina Georgaki, originally published on https://pollingreport.uk/articles/greek-electoral-see-saw-favours-new-democracy
