The Greek parliament has voted through a law to regulate the non-dom regime specifically for foreign pensioners, according to business advisory firm Eurofast.
It says that individuals, who are beneficiaries of overseas pension income and want to transfer their tax residency to Greece, are subject to an alternative method of taxation for that income.
This is if the following conditions are met:
- they were not tax residents of Greece in the previous five out of the six years prior the transfer of their tax residency to Greece; and
- they transfer their tax residency from a state, which has in force an agreement on administrative cooperation in the field of taxation with Greece.
Attractive
Maria Sarantopoulou, chief tax and legal adviser at Eurofast, said: If the taxpayer is accepted to be included in the alternative way of taxation for income arising abroad, then the individual shall pay, once-off, a tax at a rate of 7% on the total of their income obtained abroad, each year.
“With the payment of this tax in Greece, every tax liability of the individual for this income arising abroad is considered to be paid in full.”
Sam Instone, director of AES International, told International Adviser: “This is great news for those thinking of retiring to Greece as their parliament vote to implement an attractive tax regime for foreign pensioners.
“A preferential method of taxation now applies to newer residents or those from countries where a double taxation agreement exists.”
Previous incentives
This comes several months after the Greek parliament ratified a tax bill, which introduced significant changes in legislation in the country.
The alternative tax regime allows a high net worth investor to pay a fixed tax of €100,000 (£90,930, $118,384) in a year, irrespective of the total income earned abroad.
Individuals can apply for this regime for a maximum of 15 years.
HNWIs who choose to transfer their tax residence to Greece will enjoy the privileges provided the conditions are met:
- the taxpayer hasn’t been a tax resident of Greece for the past seven out of the eight years prior to the transfer of his/her tax residence to Greece; and
- the taxpayer has to prove that either they or a relative have invested at least €500,000 in real estate or business or transferable securities or shares in legal entities in Greece.
The investment may have been made through a legal entity in which the taxpayer holds the majority of the shares.
Extension of regime
Sarantopoulou added: “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.
“With the payment of this fixed tax, the individual bears no further tax obligation for income earned abroad and they are also exempted from inheritance or gift tax on properties located abroad.”
