The Greek Parliament has implemented the Tax Bill 4646/12.12.2019, introducing significant amendments related to the Greek Tax system. By virtue of this Law, triggered are segments of the Greek Taxation, significant for both individuals and legal persons and amended are few Legal Acts, namely the Income Tax Code (ITC), the Tax Procedures Code (TPC), the Value Added Tax Code (VAT) and other legislation, with an intention to incentivise foreign investors to among the other things – move their tax residence to Greece by granting them with favourable tax regime on their foreign funds.
As per the above legislative changes, high net-worth individuals (HNWIs) may become non-domiciled tax residents in Greece without a need to actually spend time in the country. Under this scheme, the individual taxpayer will be paying a fixed tax of one hundred thousand euro (€100,000) per year, irrespective of the total income earned abroad. This favourable regime can apply for a maximum duration of 15 fiscal years. HNWIs who choose to transfer their tax residence to Greece will enjoy the privileges of special tax treatment provided the below conditions are met:
- the taxpayer has not been a tax resident of Greece for the past seven (7) out of the eight (8) years prior to the transfer of his/her tax residence to Greece, and
- the taxpayer has to prove that either (s)he or a relative have invested at least five hundred thousand euro (€500,000) in real estate or business or transferable securities or shares in legal entities seated in Greece; the investment may have been made through a legal entity in which the taxpayer holds the majority of the shares. This investment has to be completed within a period of maximum three (3) years from the filing of the application to obtain the tax residency status. It should be noted that this condition is not applicable if applicants have already been provided with a ‘golden visa’ or other residence permit obliging them to make an investment in Greece.
Moreover, the individual has the right to request the extension of this regime to a relative. In that case, they will be paying an additional tax of €20,000/relative while provisions on gifts, inheritance and parental gifts will not apply.
Deadline for submission of applications for transfer of fiscal residence of an individual for obtaining the non-dom tax status is by 31st March of the relevant fiscal year.
With the payment of the abovementioned fixed tax, the individual taxpayer bears no further tax obligation for income earned abroad and (s)he is also exempted from inheritance or gift tax on properties located abroad. Individuals involved will, however, be subject to Greek income tax according to the local rules and progressive tax scales only on their Greek sourced income.
Fidescorp’s Greek team would be glad to assist further.