Tax incentives for strategic investors and HNWI
A. Conditions for inclusion in the regime
Individuals who transfer their tax residence to Greece may opt for alternative taxation of foreign-sourced income, provided that they fulfill the following conditions cumulatively:
a) he/ she was not tax residents of Greece for the previous seven (7) out of eight (8) years before the transfer of his/ her tax residence to Greece, and
b) he/ she proves that either himself/ herself or any of his/ her relatives or through a legal person or legal entity in which he/ she holds the majority of stocks or shares, invests in real estate or companies or securities or stocks or shares in legal persons or legal entities established in Greece (as defined in Ministerial Decision (KYA) No 46834/ 2023). The amount of this investment cannot be less than five hundred thousand (500.000) euros. The investment should be completed within three (3) years with effect from the application date.
If the application for inclusion in the alternative tax regime is accepted, the individual shall pay a flat tax of 100.000 euros each tax year, irrespective of the level of income acquired abroad. The taxpayer can request extension of the provision to his/her relatives and in this case a flat tax of 20.000 euros shall be paid each tax year for each relative and the provisions on the taxation of donations, inheritances and parental grants shall not apply. For income arising in Greece, taxation is imposed in accordance with the general provisions of the ITC (Law 4172/ 2013).
B. Procedures and deadlines
Individuals may submit an application for the transfer of tax residence in order to be subject to alternative taxation of foreign-sourced income, under Article 5A of the ITC, to KEFODE by March 31st of the relevant tax year. The tax administration examines the application and issues a decision approving or rejecting it by the last working day of June of each year.
The application must be accompanied by proof of transfer of the minimum amount of the investment, 500.000 euros, to an account of a financial institution established in Greece. Within a deadline of 6 months from the end of the 3-year deadline from the date on which the application for in inclusion in the tax regime is submitted, the taxpayer shall be obliged to appear at the Tax Authority of IAPR, along with the relevant supporting documents demonstrating the completion of the investment and that he/ she continues to be subject to the alternative tax regime.
The tax administration is obliged to update the relevant web application and to inform the tax authorities of the country concerned about the transfer of the tax residence for the taxpayer.
C. Payment of the tax
Once the application is approved, no later than the last working day of June of the relevant tax year, the Tax Office of Residents Abroad and of Alternative Taxation for Greek Tax Residents shall, for the first year of inclusion in this tax regime, issue a tax assessment act for the tax liability in he taxpayer’s name and the amount of the flat tax corresponding to him, namely 100.000 euro (In case of relatives, +20.000 euro for each one included in the tax regime).
Tax shall be paid each tax year in one installment by the last working day of July and shall not be offset against other tax liabilities or any credit balances of persons who have been included in the alternative tax regime. Specifically, in the first year of inclusion under the tax regime, the individual shall be obliged to pay the lump-sum amount of tax withing 30 days from approval of the application.
If any tax year the taxpayer does not pay the entire amount of tax, he or she ceased to be subject to the provisions of tax regime and from the relevant tax year onwards will be taxed on his or her global income under the general provision of the ITC.
D. Filing of income tax return
Taxpayers are obliged to declare only Greek source income. There is no obligation to declare the foreign-source income, which is covered by the regime.
E. Eligible Investments
The taxpayer who transfers his tax residence to Greece has to prove that he or a relative, or through a legal person or legal entity, in which or in which, respectively, it holds the majority of shares or units, makes a maximum of three (3) distinct investments with own funds of at least five hundred thousand (500,000) euros, not excluding other sources of financing for the excess amount, in one or more of the following categories:
o Investment in real estate in Greece.
o Purchase of existing or creation of new fixed establishments in Greece for the exercise of business activity through a personal business.
o Acquisition of participation securities in a Greek company, which must be non-listed and must develop a business activity in Greece.
o Purchase of Bonds of the Greek Public Sector.
o Capital contribution for the participation in an Alternative Investment Fund.
o Purchase of securities or corporate bonds of Greek companies, of ETFS shares and/ or bonds of the Greek public sector which are subject to trade in regulated markets or multilateral trading mechanisms operating in Greece.
