It has been almost three months since the Greek Parliament ratified Law 4646/2019, a new tax bill, which introduced significant changes in the Greek tax legislation. Individuals, legal entities and the real estate sector will be the most affected by these amendments and whilst the effects remain to be seen in the near future, below we focus on the long-anticipated non-dom regime.
According to the new code on income taxation, as amended by L. 4646/2019, high net-worth individuals (HNWIs) now have worth-considering incentives for transferring their tax residency to Greece. The alternative tax regime (non-dom) dictates that the investor will pay a fixed tax of one hundred thousand (100,000) euro/tax year, irrespective of the total income earned abroad. This favourable regime can apply for a maximum duration of 15 fiscal years. HNWIs who choose to transfer their tax residence to Greece will enjoy the privileges of special tax treatment provided the below conditions are met:
- the taxpayer hasn't been a tax resident of Greece for the past seven out of the eight years prior to the transfer of his/her tax residence to Greece and
- the taxpayer has to prove that either (s)he or a relative have invested at least five hundred thousand (500,000) euro in real estate or business or transferable securities or shares in legal entities seated in Greece; the investment may have been made through a legal entity in which the taxpayer holds the majority of the shares.
Moreover, the individual has the right to request the extension of this regime to a relative. In that case, they will pay an additional tax of 20,000€/relative while provisions on gifts, inheritance and parental gifts do not apply.
With the payment of this fixed tax, the individual bears no further tax obligation for income earned abroad and (s)he is also exempted from inheritance or gift tax on properties located abroad.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.