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As of December 2019, Greece rolled out a tax reform (Law 4646/2019), aiming - among others - to attract High Net Worth Individuals (HNWIs) to relocate their tax domicile to Greece and opt for being subjected to an attractive tax regime for the income they generate outside Greece.
Subjection to Article 2 of Law 4646/2019 (as incorporated to Article 5a of Law 4172/2003 (Code of Income Tax)) will have the following effects to HNWIs:
The most important clauses of Decision 1036/2020 are the following:
Pursuant to Article 2 of the Decision the competent authority is the Tax Office for Foreign Residents and Alternative Taxation of Domestic Tax Residents.
Pursuant to Article 3, the requirements for eligibility are met if all following conditions are applicable:
Persons deemed as relatives for the purposes of the above are grandparents, parents, children, grandchildren and spouses.
The HNWI intending to transfer their tax domicile to Greece and be subjected to the above tax regime for income generated abroad must apply by the 31st of March of the tax year to the authority. The Administrative Tax Assessment will then be issued by the 30th of June by the authority and payment deadline shall be the last working day of July. The relatives can also be subjected to the same regime (adult relatives (parents, children, spouse) will have to consent whereas - in regards to children under the age of 18 - there is no tax liability or an obligation to consent. The tax authority must respond and either accept or reject the application within 60 days from filing,
The applicant must pay the amount of 100,000 EUR annually and 20,000 EUR annually for adult relatives who have been subjected to the same regime. Under-aged children are not subjected to any tax obligation.
With the payment of the above sum, any tax liability for income generated abroad is exhausted and the person (HNWI) is relieved of any taxes (including inheritance tax, gift tax) for assets located outside Greece.
At any time within the fiscal year, the HNWI may apply for the revocation of the subjection to the alternative tax assessment of foreign income. Any revocation will have the same effect for the relatives.
At the lapse of 3 years ( within 6 months of the lapse of the 3 year period) the tax person needs to proceed to the authority and prove the requirement for investment of 500,000 EUR in a property has been fulfilled.
If the investment has not been completed the HNWI will cease from being subjected to the alternative tax assessment of foreign income status.
As acceptable are deemed the investments that were completed after the publication of Law 4646/2019 (12th of December 2019)
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About the Author |
Ioannis Valmas LLB, LLM, (MSc) is Managing Partner at Valmas Associates and a Greek trial attorney and legal advisor that has represented – almost exclusively – since 2008, overseas clients (from government bodies to private individuals) for their administrative, business and personal legal matters in Greece gaining a stellar reputation abroad. He has lived abroad for almost a decade and earned several degrees from UK Universities. He has attended seminars at US Universities (Harvard and Stanford Law Schools). He has been a member of the Athens Bar Association for over a decade. He is appointed before the Court of Appeals and licensed to practice law throughout the territory of the Hellenic Republic, Greece. His writings on Greek Real Estate Law, Aviation Law and Shipping have been widely published in recent years by publishers in Greece and abroad.