Discover Greece's Special Income Tax Regimes for New Tax Residents
~ For foreign individuals who choose to relocate their tax residency to Greece ~
By leveraging the provisions of Greek tax legislation, and specifically the Greek Income Tax Code (ITC), individuals may benefit from significant tax advantages.
Greece has introduced favorable tax regimes for foreign tax residents who choose to transfer their tax residency to Greece, as part of its strategy to attract individuals who are currently tax residents abroad.
More specifically, through specific provisions and articles of the Greek Income Tax Code, three main incentive regimes have been established to attract foreign tax residents.
Category A: Alternative Taxation Regime for High-Net-Worth Individuals
This regime provides incentives for attracting high-net-worth individuals, with the aim of increasing public revenues, encouraging the transfer of capital to Greece, supporting the creation of investment structures, participation in investment schemes or companies, and contributing to employment creation. Eligible individuals may benefit from an alternative taxation regime applicable to their foreign-source income.
Category B: Alternative Taxation Regime for Foreign Pensioners
This regime allows individuals receiving pension income from abroad to transfer their tax residency to Greece and benefit from an alternative taxation regime for their foreign-source income. A favorable flat tax rate of 7% applies to eligible income.
Category C: Special Tax Regime for New Tax Residents with Greek Employment or Business Income
This regime further expands Greece's framework for attracting foreign tax residents by introducing a special method of taxation for income derived from employment and business activities carried out in Greece by individuals who transfer their tax residency to Greece.
With extensive experience in advising non-resident clients on Greek tax matters, our firm provides specialized guidance and support for accessing Greece's favorable tax incentive regimes.
From eligibility assessment and application procedures to ongoing compliance requirements, we manage every step of the process with accuracy and professionalism.
Below, you will find a detailed FAQ section covering each available tax regime.
Category A
1. Who can benefit from this regime?
Individuals who relocate their tax residency to Greece and make qualifying investments in the country may be eligible to benefit from Greece's alternative taxation regime, which applies to income arising outside Greece.
2. What are the Tax Obligations?
Individuals benefiting from the alternative taxation regime are subject to a fixed annual lump-sum tax of €100,000 on their foreign-source income, irrespective of the level of income generated abroad. The regime is available for a period of fifteen (15) consecutive tax years, starting from the tax year in which the application for inclusion in the regime is filed.
3. Can Related Family Members Also Benefit from the Regime?
If the alternative taxation regime is extended to eligible family members of the applicant, a fixed annual tax amount of €20,000 applies for each additional family member included in the regime.
4. Is there an obligation to declare foreign-source income?
Individuals who qualify for the alternative taxation regime are not required to report foreign-source income that falls within the scope of the regime and is subject to the fixed alternative taxation rules.
Category B
1. Who can benefit from this regime?
Individuals receiving foreign-source pension income who relocate their tax residency to Greece may qualify for Greece's alternative taxation regime, which provides favorable tax treatment for income arising outside Greece.
2. What are the Tax Obligations?
Individuals benefiting from the alternative taxation regime are subject to a fixed annual tax rate of 7% on their total foreign-source income, regardless of the amount of income generated abroad during the relevant tax year.
3. When does the tax regime take effect?
The regime becomes effective from the tax year following the submission of the individual's application for inclusion and applies for a maximum period of fifteen (15) consecutive tax years. Eligible individuals may benefit from the regime for the subsequent fifteen (15) tax years, subject to the applicable requirements and conditions.
4. What happens in the event of failure to pay the required tax?
Where an individual benefiting from this regime fails to fully pay the required tax amount for their foreign-source income in any given tax year, they will lose eligibility for the favorable tax treatment provided under the regime. As of the relevant tax year and thereafter, their worldwide income will be taxed in accordance with the general provisions of the Greek Income Tax Code.
5. Does the regime affect the application of Double Tax Treaties?
The provisions of this regime do not override or limit the application of Greece's Double Tax Treaties (DTAs) with other jurisdictions. Individuals remain entitled to the benefits and protections provided under international agreements concluded by Greece for the avoidance of double taxation on income and capital.
Category C
1. Who can benefit from this regime?
Individuals who relocate their tax residency to Greece may qualify for Greece's favorable tax incentive regime, provided that they meet the following conditions:
- they provide services in Greece under an employment relationship; or
- they conduct individual business activities in Greece; and
- they commit to maintaining their tax residency in Greece for a minimum period of two years.
2. What Tax Benefits Are Available?
Individuals who generate income from employment or self-employed business activities in Greece may qualify for Greece's special tax incentive regime, which provides favorable tax treatment for their Greek-source income arising from these activities.
Eligible individuals may benefit from the following incentives:
- A 50% income tax exemption for a period of seven (7) consecutive tax years on income derived from employment and/or business activities carried out in Greece.
- An exemption from annual deemed income calculations ("objective expenditure") for seven (7) consecutive tax years, including those arising from the ownership or use of residential properties (primary and secondary residences) and private passenger vehicles, irrespective of the number of vehicles.
3. What happens if the activity is discontinued?
Where an individual ceases to perform employment activities in Greece or discontinues their individual business activity in Greece for a period exceeding twelve (12) months, the application of the favorable tax provisions will cease from the relevant tax year in which the employment relationship or business activity is terminated.
As of that tax year and thereafter, the individual's worldwide income will be taxed under the general provisions of the Greek Income Tax Code.
4. What are the consequences of transferring tax residency back to another country?
If an individual relocates their tax residency outside Greece, a formal decision is issued terminating their access to the favorable tax provisions of the regime, effective from the tax year in which the tax residency transfer abroad occurs.
Combining the Three Tax Incentive Regimes
1. Is It Possible to Benefit from More Than One Tax Regime?
The possible combinations between the three tax regimes are as follows:
- An individual who has been approved under Category A cannot subsequently be included under Category B.
- An individual who has been approved under Category B cannot subsequently be included under Category A.
- An individual who has been approved under either Category A or Category B may also qualify for Category C, and vice versa, provided that all applicable eligibility requirements are met at the time of inclusion. This also applies where inclusion under the respective regimes takes place during the same tax year.