Greece

Non-dom regime for investors

With effect from 12 December 2019, a new non-dom regime is introduced, providing for an alternative way of taxing income derived abroad for individuals transferring their tax residence to Greece (non-dom), subject to the following conditions:

• taxpayers were not Greek tax residents for the previous seven of the eight years prior to the transfer of their tax residence to Greece, and
• it can be proved that they invest at least EUR 500,000 in real estate, businesses, or transferable securities or shares in legal entities based in Greece, either themselves or their relatives (i.e. spouses and those in the ascending or descending line), or through a legal entity in which they hold the majority of the shares.

Under this regime, individuals will pay a lump-sum tax of EUR 100,000 per tax year, irrespective of the amount of income earned abroad, for a maximum of 15 fiscal years. Moreover, it is possible to extend the regime to any of their relatives by paying an additional tax equal to EUR 20,000 per person per tax year. In such cases, the provisions of inheritance, gift, and parental grant tax will not apply.

It is noted that any tax paid abroad on income covered by the alternative taxation regime will not be offset against the tax liability of the above persons in Greece.

Furthermore, in case the persons who have opted for the non-dom regime earn taxable income that arises in Greece, this will be taxed in accordance with the general provisions of the ITC. In addition, in the event of non-payment of the full amount of the lump-sum tax, the special regime will be abolished, and these persons will be taxed for their worldwide income in accordance with the general provisions as of the tax year in question onwards.

It should be noted that taxpayers opting for the regime are not required to declare any income earned abroad. Furthermore, they will be able to justify the imputed income calculated based on deemed expenses and assets acquisition by importing funds from abroad.

The relevant application for the transfer of tax residence and for obtaining the non-dom status has to be submitted by individuals by 31 March of each tax year. Furthermore, it will be possible to apply for revocation of the non-dom status in any tax year during the 15-year period.

Non-dom regime for pensioners

With effect from 31 July 2020, a new non-dom regime applies, enabling individuals entitled to a pension that arises abroad to be subject to a favourable taxation of their income. The application of this regime does not affect the validity of the applicable DTTs.

Every tax year, individuals will pay tax at a rate of 7% on their foreign-sourced income, with exhaustion of the tax liability for this income. The tax is paid each tax year in one instalment until the last working day of July and cannot be offset against other tax liabilities or any credit balances.

To be eligible for this new regime, individuals must, cumulatively:

• not have been Greek tax residents for the previous five of the six years prior to the transfer of their tax residence to Greece, and
• transfer their tax residence from a state with which an agreement on administrative cooperation in the field of taxation with Greece is in force.

The application for the tax residence transfer and submission to this regime is submitted by the pensioner until 31 March of the respective tax year.

Pensioners subject to this regime are required to declare their income earned both in Greece and abroad. Furthermore, non-payment of the entire amount of tax due in one tax year results in the application of the general provisions of the ITC for the taxation of their global income from the relevant tax year onwards.

Alternative taxation regime for relocated employees

For tax years beginning on or after 1 January 2021, a new regime for the alternative way of taxing income from salaried employment, as well as from business activity arising in Greece, for individuals transferring their tax residence to Greece, is available.

For inclusion in this regime, and exclusively for the filling of new jobs, the individual transferring their tax residence to Greece is subject to favourable taxation for the income from salaried employment obtained in Greece, if cumulatively:

• was not a Greek tax resident for the previous five of the six years prior to the transfer of one's tax residence to Greece
• transfers one's tax residence from an EU member state or EEA country or from a country with which an administrative cooperation agreement in the field of taxation with Greece is in force
• provides services in Greece in the context of an employment relationship with a Greek legal entity or with a permanent establishment (PE) of a foreign company in Greece, and
• declares that one will remain in Greece for at least two years.

A similar application is envisaged for individuals who transfer their tax residence to Greece in order to carry out individual business activity in Greece.

If the taxpayer's application is accepted, an exemption from income tax and the special solidarity contribution is provided for 50% of one's employment income / income from individual business activity earned in Greece during the tax year. Furthermore, for individuals subject to the alternative taxation provisions, the annual deemed income will not apply to the amount resulting from the residence or passenger car.

The application for the transfer of the tax residence and the inclusion in the new regime is filed to the Tax Administration by the individual as follows:

• For the commencement of service/business activities that takes place by 2 July of the year in question, the application shall be submitted by the end of that year and shall be considered for said year. If the taxpayer applies within the year following the assumption of service or commencement of operations, the application shall be considered for the taxpayer's inclusion in the special tax regime for the year following the assumption of service.
• For an assumption of service or commencement of operations that takes place after 2 July of the year of relocation, the application shall be submitted by the end of the following year and shall be considered for the taxpayer's inclusion for that year.

The provisions on alternative taxation shall apply to the income of the tax year for which the individual files one's application and expires after a total of seven tax years, with no possibility of further extension.

Tax incentives to angel investors

With effect from 29 July 2020, individuals who contribute capital to a duly registered start-up company may deduct from their taxable income an amount equal to 50% of the amount of their contribution in the tax year in which it took place.

This incentive applies to capital contributions via a bank deposit of up to EUR 300,000 per tax year, which are invested in up to three start-ups with a maximum investment of EUR 100,000 per start-up.

If after an audit it is proved that the capital contribution has been made to obtain a tax advantage that defeats the purpose of the provision (i.e. the provision of investment funds and support during the early stages of operation of a start-up in order to increase investment activity), a fine, equal to the amount of the tax benefit sought, will be imposed.