With the "weapon" of the good performance of the country in the "battle" against the pandemic of Covid-19, but also the momentum of Brexit, the Greek government will try the next period to attract foreigners to the country through a package of incentives. The main reason it the transportation here of their tax residence but also to repatriate scientists and business executives.

The Ministry of Finance is introducing the tax incentives with specific conditions, while it is estimated that this initiative concerns about 400,000 Greeks abroad and beyond.

Attracting foreign investors, entrepreneurs and foreign investment, as well as reversing the brain drain, are considered catalysts for the country's future economic performance, after a decade of crisis that cost about 25% of its GDP.

The incentives provided for attracting foreign capital target 3 categories and in particular:

a. Individuals with large fortunes

On February 2020 Greece has also announced the procedure which should be followed by individuals who wish to transfer their tax residence in Greece under the provisions of the favourable Non-Dom tax regime.

Briefly the non-dom tax regime provides the exhaustion of tax liability for any foreign-sourced income by paying an annual flat tax of €100.000, regardless of the amount of income earned abroad and with no obligation to declare any foreign income in Greece.

More specifically the taxpayer who is beneficiary of a foreign source pension and transfer his tax residency in Greece, could be subject to the alternative Non-Dom regime, under the following two (2) requirements:

a) The individual was not a Greek tax resident during the last seven (7) from eight (8) years before the transfer of his tax residency in Greece.

b) the individual himself/herself or through a legal entity or one of his/her relatives (i.e. spouse, direct ascendants, or descendants) has invested or will invest an amount of at least 500.000 € in Greece. The investment may take different forms, such as investments in real estate, business, securities or shares in legal entities registered in Greece.

The investments should be completed within 3 years from the submission of the application of transfer.

Individuals may benefit from the Non-Dom taxation as from tax year 2021 onwards by submitting their application until 31st March 2021.

b. Retirees

Any person, with income from a pension that arises outside Greece, who decides to move his tax residence in Greece, will be able to be subject to the alternative method of taxation of the Non-Dom. The condition is that the interested party has not been a tax resident of Greece for the previous 5 of the 6 years before the transfer of his tax residence to Greece.

The application for the transfer of the tax residence will be submitted to the Tax Administration by the pensioner until March 31 of the respective tax year. Within 60 days from the submission of the application, the Tax Administration will examine the application and will issue a decision, by which it will approve or reject it.

If the application for the transfer is accepted, the pensioner will pay each year an independent tax of 7% on the total income earned abroad. With the payment of this tax, all his tax liabilities for this income will be exhausted.

c. Executives

To attract business executives and freelancers, a 50% discount on income for 7 years is given as an incentive. The above will contribute with their knowledge and experience to the economic recovery of Greece.

This measure openly targets Greeks that leave outside country, aiming to reverse the brain drain but is not limited to it. Every Greek or foreigner, regardless of nationality, who has had his tax residence outside Greece for 7 of the last 8 years, will be able to take advantage of the incentives.

A necessary condition for someone to settle in Greece for tax purposes and to earn the 50% discount is:

• Not be a tax resident of Greece in the previous 7 of the 8 years before the transfer of the tax headquarters to the country.

• To transfer his tax residence from a country of the European Union, the European Economic Area or from a state with which Greece has signed an agreement on administrative cooperation in the field of taxation.

• To provide services in Greece as an employee to a domestic legal entity or to a permanent establishment of a foreign company in Greece.

It is worth noting that recently the wide expansion of telework, due to the situation of the coronavirus, favors the relocation to Greece of residents abroad.

Our law office based in Thessaloniki, provides comprehensive and vertical legal, tax and technical services, as well as communication, promotion, and publicity services.

We undertake the application and the whole procedure for someone who wants to transfer his tax residency in Greece.