Sun, sea and low taxes. It is the dream of foreign retirees who have visited or often visit Greece and are considering the possibility of transferring their tax residence to the Republic.
Deutsche Welle records the excessive increase in demand for vacation homes in Greece, as the publication states that the Hellenic approach to the pandemic has converted the country into the safest destination, as well as an attractive place for the purchase of real estate. In Britain alone, the Interest has increased by 200% and in Germany by 50%! According to the report, Greece “has become the largest real estate market in the last decade during the crisis period due to the Covid-19 pandemic”. Only Germans have increased their investment in real estate in Greece to a 50%, choosing regions such as the Peloponnese, but also islands like Amorgos, Crete, Corfu and Karpathos. Foreign citizens feel safe in a country where there are very low crime levels, and where the sun and the Aegean Sea offer an exceptional landscape, combined with tranquility and la dolce vita of the Mediterranean coasts.
According to the Handelsblatt newspaper, Greece is the most sought-after country for foreign retirees, not only for its climate and idyllic scenery, but also because of the advantages offered by the new Tax Law proposal of 2020. The new bill that was voted and entered in force the 31 st of July of this year establishes the taxe rate at a flat 7%. The figure applies to all global income of foreign retirees who establish their tax residence in Greece. The income includes not only pensions, but also business activities, investment, rental income from real estate etc.
The new tax law specifies the following points that must be met:
i) The retiree must not have been a tax resident of Greece during the last five of the six years prior to the transfer of the tax residence to Greece.
ii) The original tax residence state of the retiree must have an established bilateral administrative cooperation agreement with the Hellenic Republic.
The provisions of the new Tax Law specify the procedure as follows:
i) The tax at a flat rate of 7% is paid each tax year in a single deposit until the last business day of July and is not offset by other tax obligations or credit balances of the physical person, subject to the alternative tax method.
ii) The request for the transfer of the tax residence pursuant the new Law on the alternative form of income tax in accordance with this article is presented to the tax administration by the 31st of March of the respective fiscal year. Within a period of sixty days from the date of presentation of the application, the tax administration examines the request and issues a decision of approval or rejection.
iii) The deadline for submitting the application for the tax year 2020 is the 30 th of September 2020. The provisions also apply to physical persons who meet the requirements and have already transferred their tax residence to the Hellenic Republic within the previous tax year. In that case, the taxable amount is paid within 30 days after the approval of the taxpayer’s application.
iv) The application of the measure becomes effective from the following tax year for which the physical person has applied for and the effects of the program shall remain in force for ten (10) tax years.. Subject to the provisions of this article, this program cannot be extended for more than 10 years.
This article is for informational purposes only and does not constitute, under any circumstances, legal advice. For further information on the matter, please contact our law firm and our representative in Athens shall assist you.
Nika Kalifatidou
Lawyer – Legal Consultant
Arsen Theofanidis LLC
Athens – Limassol