European tax harmonisation is a distant dream, and each country is free to introduce its own tax measures to attract retired taxpayers to their territory. Spain, Portugal and Italy have special tax statuses that allow them to pay less or no tax. Since 2020, it is now Greece that has entered the belly-dance for retirees. The country has changed its tax regime, going one step further than the former NHR status in Portugal, and offering a flat rate of 7% for a period of 15 years on private sector retirement pensions and dividends. Before embarking on your project, it is important to be aware of the rules governing the new Greek tax arrangements. In order to make the right decisions and have all the cards in your hand, Lisbob, the expatriate assistant, tells you all about this new tax status for retirees in Greece.
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ORIGIN
In July 2020, Greece passed law 4714/31.7.2020 introducing a tax regime known as NDR (for non-domiciled resident, also called non-dom or NDR) aimed at attracting foreign retirees to the country. This law complements the tax arrangements for non-domiciled residents introduced in 2019, and takes the opposite approach to Portugal, which has just completely abolished NHR status and its 10% rate for 10 years.
Greece is now moving up a gear, offering a very attractive rate of 7% for 15 years. This Greek tax status is designed to be retained and developed, in the same way as Italy's impatriate tax status.
TAX BENEFITS
Greece has therefore also decided to increase the tax advantage offered to beneficiaries of the NDR status. The country offers a fixed rate that is applied to foreign retirement pensions. Here is the tax advantage offered by the Greek tax status:
Flat rate: 7%.
It should be noted that this applies not only to pensions but also to foreign income from investments or other sources (royalties, dividends, etc.).
The tax must be paid before the end of July for the previous tax year, and the application submitted before 31st March for the current and previous tax years. For example, a taxpayer arriving in Greece in 2024 will have until 31st March 2025 to register for both 2024 and 2025.
An important point to bear in mind is that taxpayers moving to Greece will not be exempt from inheritance and gift tax on assets located abroad.
You will know everything about the non-domiciled resident tax status in Greece
DURATION
Greek NDR tax status is offered for a period of 15 years, which beats the tax incentive records of other countries. The beneficiary is obliged to remain resident for 2 years, failing which the tax advantage will have to be repaid.
CONDITIONS OF ACCESS
Here are the conditions to benefit from the Greek NDR tax status for pensioners:
Not to have been resident for tax purposes in Greece for the 5 years preceding the application, or 6 years preceding the change of residence;
Decide to transfer tax residence to Greece from a State with which Greece has an administrative cooperation agreement in the tax field;
Receive private sector pensions.
There is one exception for benefiting from this status while receiving a public sector pension: having Greek nationality.
However, paying this tax does not entitle you to a tax credit or to offset other taxes payable in Greece. On the other hand, no other tax is levied on foreign-source income. The 7% tax is therefore in full discharge of tax liability. It is also compulsory to declare all worldwide income in Greece.
HOW TO OBTAIN GREEK NDR TAX STATUS?
Here are the steps to follow in order to obtain Greek NDR tax status:
Obtain a Greek AFM tax number (before leaving for Greece);
Find accommodation in Greece (rent or buy);
Register as a Greek tax resident;
Apply for status with the Greek tax authorities.
The Greek tax authorities may request various documents such as proof of tax residence in your previous country and for the last 5 years, or proof of living in Greece.
My team and I can help you put together a complete file and obtain that famous Greek tax status. You can find more information by clicking here.
With this new tax status, and thanks to the success of the 1st version of it, Greece is no longer hiding and is keen to attract foreign retirees who wish to leave their country, or who are not yet familiar with the charms of Greece. This tax status for retirees is sure to attract many new residents, especially now that the RNH status in Portugal has come to an end.
