New Greek tax legislation has been ratified by the parliament with several changes in store for Greek tax rules, concerning, among other things, residency, the alternative taxation method, tax treatment of benefits-in-kind, and the income tax table. In an effort to attract high net worth individuals, alternative taxation on foreign source income earned by individuals who transfer their tax residence to Greece is introduced, if the following conditions are cumulatively met: the individual was not a Greek tax resident for seven out of eight years preceding the transfer of his tax residence to Greece; the individual can prove that they or their relatives or a legal entity in which they hold the majority of the shares, invests in real estate or moveable assets or shares of legal entities based in Greece; the amount of the investment should not be lower that 500,000 euros and must be completed within a period of three years. In particular, individuals who will utilize the alternative taxation method should pay a lump sum tax of 100,000 euros on an annual basis, regardless of the level of their foreign source income. In the case where a relative utilizes respective provisions, they should pay a lump sum tax of 20,000 euros on an annual basis. In addition, the government is formally inviting foreign pensioners to shift their tax residence to Greece with the introduction of a single tax rate of 7% for their entire income obtained abroad. For pensioners to qualify for this beneficial rate, they should not have been tax residents of Greece over at least five out of the six financial years before their tax relocation from a country with which Greece has a valid agreement concerning administrative cooperation on tax issues. As soon as a foreign pensioner’s application is approved, the sum of their income obtained abroad will be taxed at a flat rate of just 7% for the next 10 years. What this means in practice is that for a period of 10 years, any retirees coming over to Greece as new tax residents with revenues abroad via pensions, business activities or various investments, will pay a very low tax.
