Olive tree, Kolymbari, Crete

Transfer of Tax Residence to Greece: Greek Alternative or Lump-Sum Tax for High Net Worth Individuals

Alternative Taxation of Personal Income Tax

("Eναλλακτικής φορολόγησης εισοδήματος φυσικών προσώπων")

Apply for the Greek alternative taxation

Description of the Greek Alternative Taxation Regime

Since 2020, Greece offers an alternative or lump-sum tax of €100,000 per year on non-Greek income for 15 years to foreign high-net-worth individuals who (i) were not Greek tax residents in the last 7 out of 8 tax years (ii) transfer their tax residence to Greece and (iii) invest €500,000 into Greece within 3 years.

Individuals from outside the EU benefitting from the Greek Golden Visa program having invested in intangible investments (here) are not subject to the €500,000 investment requirement.

The new Greek non-dom tax regime for wealthy businesspeople worldwide can be extended to family members who pay an additional lump-sum tax of €20,000 per year irrespective of the amount of income they earn abroad. There is no reporting and payment requirement for unmarried children under 18 years who live with the applicant.

Applicants can opt out at any moment of the Greek alternative taxation method. Revocation applications must be filed before 31 March of each year. Applicants may equally opt in again into the special Greek tax regime.

To sum up the underlying principle: the special Greek tax regime fully exhausts the Greek tax liability on foreign income by replacing it with an alternative flat tax of €100,000 per year.

What Are the Key Benefits of the Greek Alternative Tax?

• Taxpayers subject to the Greek lump-sum tax have no obligation of declaring foreign income in their Greek tax declaration
• The Greek alternative tax provides an exemption from inheritance and gift tax on foreign real estate property and other assets
• Under the Greek alternative taxation regime there is no legal requirement of residing more than 183 days in Greece to be considered a Greek tax resident. However, individuals spending more than 183 days in another country risk being considered tax residents in that country too.

What Are the Key Downsides of the Greek Alternative Tax?

• Taxes already paid abroad on foreign revenues can not be offset against the Greek lump-sum tax
• If the full amount of the Greek alternative tax is not paid by 31 December the special tax regime ceases and usual Greek tax on worldwide income applies instead
• The Greek alternative tax is not suitable for US citizens who are taxed on worldwide income
• The Greek alternative taxation is less attractive for persons earning Greek income which must be declared every year and is taxed at the normal Greek income rate of up to 44%

Tax Residence in Greece

An individual who is present in Greece for a period exceeding 183 days cumulatively during any twelve-month period is deemed a Greek tax resident as of the first day of Greek presence.

Who Can Apply for the Greek Lump-Sum Tax Regime?

1. The applicant (and any family members) must have been resident outside Greece for at least 7 out of 8 years preceding application day
2. The applicant must apply for a Greek TIN number, open a Greek personal bank account and provide a letter from a Greek auditor confirming that €500,000 are held at the Greek bank for investment purposes
3. Yearly payment of a €100,000 lump-sum tax (main applicant)
4. Yearly payment of a €20,000 lump-sum tax (family members)
5. Commitment to invest €500,000 into Greek real estate or stocks within 3 years

What Are the Costs of the Alternative Tax Regime in Greece?

Submission Timeline

Applications for the Greek alternative taxation regime must be filed by 30 September with the competent tax office.

The Greek tax authorities issue their decision within 60 days of application date.

The first lump-sum tax payment must be made within 30 days from the issuance of the decision.

After 3 years from application date, and no later than 6 months after the expiration of the 3-years deadline, Greek lump-sum taxpayers must provide the Greek tax authorities with documentation supporting the completion of the investment of €500,000 - either in personal name or through a legal entity or a relative.

If the qualifying investment was not operated within 3 years the preferential Greek tax regime will be deemed void and normal Greek taxation will apply with retroactive effect. Any lump-sum payments will not be refunded.