Tax incentives in Greece attract foreign investors, pensions, workers

Initial results from the implementation of tax incentives aimed at attracting new tax residents and investments in Greece show that the measures are beginning to pay off. In particular, according to data presented today by the Ministry of Finance, tax incentives have attracted in band 2021 in Greece 75 investors, 214 retirees and 1,000 employees.

In particular, the four measures, as presented by Staikouras, are as follows:

• The beginning was made with Law 4646/2019, which introduced in Greece the institution of Non-Doms to attract foreign tax residents - investors, who, by moving their tax residence to Greece and making significant investments in our country, benefit - for a period of up to 15 years - from an alternative taxation of income of foreign origin.
• Subsequently, Law 4714/2020 extended the alternative income taxation to foreign retirees, who transfer their tax residence to our country, by applying a rate of 7% on income of foreign origin.
• In addition, Law 4758/2020 established tax incentives to attract foreign workers and the self-employed, but also Greeks who left the country during the financial crisis, to move back their tax residence and work professionally in Greece. Specifically, for the aforementioned categories of natural persons - employees or self-employed - a 50% exemption from income tax and the special solidarity contribution was introduced, for a period of up to 7 years, provided that a new employee is employed or starts a new business activity. This is a measure that contributes significantly to the effort of the brain gain, ie the return of Greeks with a high level of knowledge, professional skills and abilities.
• The "quartet" of interventions was completed last February, with Law 4778/2021, which established clear and transparent rules for the establishment and operation of special purpose companies for the management of family property (Family Offices), taking into account international best tax practices. A framework that will be fully implemented in the near future, with the issuance of the Joint Ministerial Decision on the services that Family Offices can provide - indicatively ".

The results

According to the Ministry of Finance, the first results from the tax incentives are the following:

• Article 5A of the CFA - For investors: In 2020, the first year of application of the provisions, 20 applications were submitted, of which 18 investors and 7 of their relatives were approved. In 2021, in the second year of implementation, 57 investors and 16 relatives from 18 countries, inside and outside the European Union, were approved. The total amount of the confirmed tax is 7.9 million euros for 2021, of which an amount of 7.5 million euros has already been paid to date.
• Article 5B of the CFA - For foreign retirees: In 2020, the first year of application of the provisions, 8 applications were submitted by taxpayers from 4 countries, mainly inside and outside the European Union (Germany, Switzerland, USA, Netherlands), of which 7 were approved. In 2021, the second year of its application, 206 applications were submitted by taxpayers from 21 countries of the European Union and abroad of which 150 applications were approved. For 2021, there is still no data on the tax that will be paid by the 150 eligible retirees.
• Article 5C of the CFA - For employees and te self employed. The application process started this year, after the issuance of the relevant Ministerial Decision. As early as 2021, about 1,000 individuals - employees, and sole proprietors - have already applied for the benefits. Due to the strong interest, the deadline for submitting applications was extended until the end of September 2021.