It is possible to use the preferential system for 15 years after changing your tax residence. The relevant innovations are set out in Article 5A of Act 4172/2013.
New tax residents in Greece are able to pay tax on world income in the form of a one-time fixed payment of €100,000 per year.
If several family members become tax residents, the investor pays an additional EUR 20,000 per year for each close relative. Close relatives are the spouse, children and parents in a direct line.
The fixed payment does not depend on the amount of income that the tax resident receives from all sources outside Greece. Such a system is more profitable for people with high incomes than paying taxes at an interest rate.
Tax breaks will help attract wealthy people to the country who will invest in the Greek economy and permanently reside there. It will also make the process of replenishing the country’s budget with foreign investment more transparent.
Conditions under which an investor may receive tax incentives
The law establishes 3 main conditions under which a foreign investor can pay income tax in Greece on preferential terms.
Change of tax residency to Greek. The exemption applies only to new tax residents who were not tax residents during the previous 7 out of 8 years before the change of tax residence.
Invest in the country’s economy. In order to receive the tax exemption, a foreigner must invest from 500 000 € in real estate, business, shares or shares of Greek legal entities. The investment must be made within the last 3 years before the tax residence change. The investment can be made both by an individual and by a company in which the future tax resident holds a controlling interest.
Participate in the Greek residence permit programme for investment. If a foreigner has been granted residence status in Greece for an investment, he/she must present a residence permit card when applying for tax status. This condition applies in accordance with Article 16 of Law 4251/2014.
Under the terms of the programme it is sufficient In this case, the investor can buy a property, rent a hotel or tourist apartment, buy a share in construction or purchase a plot of land for construction or agriculture.
The Russians are ranked 3rd in terms of the number of investors who received a residence permit from Greece for real estate investments. Since 2014, 976 Russian citizens have received resident status under the programme: 363 investors and 613 members of their families.
We talked about the statistics of the programme in the material “Published statistics of Greek residence permit for real estate investments”.
How to become a tax resident of Greece and pay income tax under the new rules
Tax residence can be changed if you reside in the country for at least 183 days per year. In this case, the foreigner may stay in the country continuously during this period or sum up the days of his stay.
In order to obtain the official status of a tax resident, you must apply to the country’s tax authorities. An application to change your tax residence is accepted until the end of the financial year – 31 March. This way, a tax resident will be able to pay taxes in the country as early as the next fiscal year.
The Tax Service considers the application within 60 days of its submission. If the applicant meets all the conditions, he will receive approval.
In the case of a preferential procedure, the full amount of income tax must be paid in one instalment within 30 days after the approval of tax status. Tax for the second and subsequent reporting periods must also be paid in a lump sum payment until the last working day of July.