Tax incentives to attract private individuals to settle in Greece
In the context of tax competition to attract taxpayers, several countries have introduced incentives to attract individuals, as they do to attract businesses. The benefits for countries that attract individuals to settle in them are multiple, as in addition to collecting the tax “consideration”, individuals spend and invest in the country of residence. Examples of countries that have introduced similar incentives are England, Portugal, Italy, Cyprus and others. Greece introduced the first incentive with Law 4646/2019.
- Brief description of the incentives
The incentives that Greece has introduced are divided into 3 categories, known as 5A, 5B, and 5C of the Income Tax Code, following the relevant article added to the Tax Code at the time of their introduction.
5A aims to attract “High Net Worth Individuals” who have not been tax residents of Greece for the previous 7 years, and provides for the payment of €100,000 per year upon exhaustion of the individual’s tax liability on his/her worldwide foreign income. In addition to paying this amount annually, the individual must also make an investment of at least €500,000, which may be in real estate, bonds, participation in a company, etc. The maximum duration of stay in the scheme is 15 years. The maximum length of stay refers to the concept of non-domiciled individual (Non-dom), an English concept that distinguishes the place where one chooses to reside from the place one considers “home”, or in other words the place where one would choose to end one’s life. Note that any Greek-source income is taxed normally.
5B aims to attract foreign pension beneficiaries to settle in Greece by offering them a tax rate of 7%. Specifically, a natural person (foreign tax resident for the previous 5 years) who receives a pension from abroad can transfer his/her residence to Greece and be subject to a regime of self-assessment of income earned abroad at a tax rate of 7% every year for a total of 15 years. It should be noted that under this regime, any income of Greek source is also taxed normally.
The 5C aims to attract employees or self-employed persons (who have not been tax residents in Greece for at least the previous 5 years) by providing an incentive of 50% exemption from income tax on their salaried employment or self-employment in Greece. Again there is a maximum time for the benefit which is 7 years and the additional requirement that the job covered must be “new”.
- Common countries of origin & profiles of those who choose Greece
In principle, the stakeholders are the Greeks abroad themselves, especially in the first and third case of incentives. Next are citizens/taxpayers from northern countries, who have a love or preference for Greece and with the additional incentive take the decision to settle. Finally, there are citizens from the U.S., Canada, Canada, France, Switzerland and also from third countries, including the U.K. which recently made an announcement of the imminent abolition of its own corresponding non-dom status from April 2025. In the case of incentive 5C the mix is more complex, especially with workers/executives in the technology sector, in innovative start-ups and in family offices who may be interested in living in Greece for a number of years. However, in this case we also have Greeks from abroad returning (‘brain gain’).
- Procedure
The procedure is not particularly complex, and involves gathering supporting documents and submitting them to the tax authority. Establishing the foreign resident status is one of the first checks that are made. This is followed by an examination of the power of attorney documents of the person submitting on behalf of the applicant for the scheme, and a check of the documents proving the status of pensioner, etc., depending on the scheme chosen. The examination of the conditions is followed by an administrative decision to join the scheme or to reject it. The most problems seem to exist in scheme 5C because the conditions are more complex and in 5A regarding the start and completion of the required investment.
The information is accurate to the best of our knowledge as at the time of writing. We have no obligation to update it. We accept no responsibility against any third party who is not a client of the firm and has not signed the terms of our engagement.