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Alternative Tax Regimes in Greece

posted 2 years ago

By Lida Maria Gavrilaki https://gavrilaki.gr/Law-Office-English-Page.html

The Greek Government, in 2021, has introduced an Alternative way of Taxing Income, which is derived from abroad for Non-Dom individuals, who transfer their tax residence to Greece. The Greek Alternative Tax Regimes are very advantageous for pensioners, service providers, employees that are hired in new job positions and investors.

The continued efforts of the Greek Government to expand and enhance their network of double taxation agreements with other countries and update existing tax treaties, create important opportunities for taxpayers that are interested in transferring their tax residence in Greece.

Our Law Office has specialization in Tax Law. As Legal Tax Experts, we provide Legal Advice and Representation to help our clients manage their tax affairs and deal with tax authorities, as well as understand their tax obligations. We offer solutions in organizing your income, adhere to the laws and meet your obligations, while focusing on optimal tax structures, to serve our clients’ specialized needs, locally and internationally. We consult you and handle your tax residence transfer in Greece in order to be benefited by the Alternative Tax Regimes.

PENSIONERS: INCENTIVES TO TRANSFER YOUR TAX RESIDENCE IN GREECE

Pensioners, who transfer their tax residence to Greece, can benefit by the single tax of 7% for their entire worldwide income.

Case study example: If your income consists of three pensions, one from a collective pension scheme and two of a private pension scheme and the sum of these pensions make a total annual income of 70,000 euros; in Greece you will be taxed with the 7% that means you will have to pay 4,900 euros income tax, while under the usual 24%, you will have to pay 16,800 income tax. As a result in this case study example, you can save 11,900 euros, annually.

The basic criteria that must be met for applying to the Alternative Tax Regime for Pensioners, are:

1. The Individual has not been a Greek Tax Resident for the last five years before their tax residence transfer.
2. Tax residents must transfer their tax residence from a country that has a bilateral administrative tax agreement for the avoidance of double taxation with Greece.

3. The pension must be obtained at least by one collective pension scheme.

The flat tax of 7% can be in force for a maximum period of 15 years.

SALARIED EMPLOYEES, BUSINESS ENTREPRENEURS: INCENTIVES TO TRANSFER YOUR TAX RESIDENCE IN GREECE

The new Greek Tax Provisions provide 50% tax deduction to foreign tax residents, who transfer their tax residency to Greece.

Benefits and incentives of the new tax regime:

• 7-year exemption from paying the special solidarity contribution, 50% tax deduction on income tax.

• Exemption from the annual objective expenses for housing and passenger cars for private use.                                                                                                                

The above exemptions and provisions are applicable, under the following conditions:

a) the applicant was not a tax resident of Greece for the previous 5 out of 6 years prior to the transfer of his tax residence to Greeceb) transfers his tax residence from an EU or EEA Member State or from a country with which Greece has a bilateral administrative agreement on tax matters

c) provides services in Greece in the context of an employment relationship in a new job position, which is exercised either in a domestic legal entity or legal entity or in a permanent establishment of a foreign company in Greece or the applicant is a self-employed freelancer.

INVESTORS: INCENTIVES TO TRANSFER YOUR TAX RESIDENCE IN GREECE

The new regime of the Greek Income Tax Code Law, introduces a flat tax rate of €100,000 for any amount of your annual WORLDWIDE INCOME for a period of 15 years, for individuals, who transfer their tax residence in Greece. Under the Greek Non Dom Tax regime you should pay only a total amount of 100,000 € per year for any income arising outside the country, irrespective of the sum amount and as a result be discharged of any tax liability for this year.

The duration of the Greek Tax Regime is 15 fiscal years maximum on the condition that you meet the requirements set by law. The benefits of the Greek Tax Regime for individuals who transfer their tax residence in Greece is not applicable for legal entities.

The above provisions apply, under the following conditions:

  • For the past seven out of eight years, prior to the transfer of tax residence in Greece, the applicant shouldn’t have been a Greek Tax Resident.
  • Proof of investment in Real Estate of EUR 500,000, or investment in businesses, or transferable securities or shares in legal entities based in Greece, either themselves or their relative (i.e. spouses, children, parents), or through a legal entity in which they hold the majority of the shares. 

We consult you and handle the whole process of transferring your Tax Residence in Greece under the Alternative Tax Regimes.

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