The Greek Non Dom Tax Regime

1. Non – Domiciliation of High Net Worth Individuals

The Greek Parliament with the ratification of the law 4646/2019 has introduced for high net-worth individuals (HNWIs) important incentive for transferring their tax residency to Greece.

The Non Domicile status will allow investor to pay a fixed tax of €100,000 per tax 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 hasn’t been a tax resident of Greece for the past 7 out of the 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 €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.

Moreover, the individual has the right to request the extension of this regime to a relative. In that case, they will pay an additional tax of €20,000/relative while provisions on gifts, inheritance and parental gifts do not apply.

Additionally, with the payment of this fixed tax, the individual bears no further tax obligation for income earned abroad and (s)he is also exempted from inheritance or gift tax on properties located abroad.

Non-Dom tax residents are subject to the aforementioned favourable regime, irrespective of whether or not they are physically present in Greece for more than 183 days and the centre of their vital relations is in Greece, as the corpus and animus criterion is not included in the requirements prescribed by Art. 5A of Greek Income Tax Code. However, individuals spending more than 183 days in another country could risk being considered as tax residents in such other country.

2. Domiciliation of Foreign Pensioners

The new tax regime aims to create an attractive tax environment for foreign pensioners as follows:

A 7% flat tax applies on foreign source pensions and any other foreign source income

Effective tax rate is subject to application of Double Taxation Conventions (DTCs) between Greece and relevant source states. To be noted that under most DTCs between Greece and OECD states taxing rights on pensions are in principle attributed to the state of tax residence (save for pensions related to governmental functions)

An exemption from special solidarity contribution applies

Duration of maximum 15 tax years from qualification

The conditions to qualify are:

To earn non-Greek source pension amounts

Have held their tax residence outside Greece for 5 out of the last 6 years

Be former residents of a country holding an administrative cooperation agreement with Greece

3. Tax Break for the Greek Source Income

This tax incentive is addressed to executives, employees, freelancers and other entrepreneurs wishing to relocate and work from Greece. Qualifying individuals will benefit from a 50% income tax break on their annual Greek source salary or business income over a period of 7 years. The tax break will apply also with respect to the corresponding special solidarity contribution. The marginal income tax rate on salary income and business income earned by individuals is 44%. An exemption also applies from deemed income rules on the use of main residence or privately used vehicles for qualifying individuals.

The conditions to qualify for this program are:

Have held their tax residence outside Greece for at least 7 out of the 8 last years

Be residents of an EU/EEA country or a country with which Greece holds an administrative cooperation agreement

Become employed by a Greek company or a Greek permanent establishment of a foreign company (this condition does not apply with respect to freelancers and other entrepreneurs); to be noted that only newly recruited employees are eligible for the plan

Stay in Greece for at least 2 years

Autor: Yacine Bougrassa, CEO, BKMS Family Office