Greek Non-Dom scheme

Greek Non-Dom scheme

Article 5A of law 4172/2013, on alternative taxation of income arising abroad of natural persons who transfer their tax residence in Greece.

Given the current economic situation, business and investment activity becomes a critical pillar of growth, which can have immediate positive effects in the direction of reversing the current economic situation, tackling unemployment and return to recovery.

Taking in consideration the need of the national economy for liquidity, the inflow of foreign capital should be governed by a favorable legal framework for investors in the standards of other countries with relevant policies and the main goal of the economic policy should be to further encourage Foreign Direct Investments and attract individuals of high income level in order to establish and do business in Greece.

In the context of establishing our country as a hospitable and attractive place in terms of the implementation of small and large investments, the Government proceeded on 30-12-2020 in issuing the Joint Ministerial Decision under No. 147269 EX 2020, which was published in Government Gazette 5789 Issue B ' and clarifies the procedure for implementing the provisions of Article 5A of Law 4172/2013, regarding alternative taxation of income arising abroad of natural persons who transfer their tax residence in Greece.

Schemes of tax residency transfer, also called “Non-dom”, target taxpayers who are established, for tax purposes, in a country, but due to the lack of adequate connection to that country except their mere physical residence, e.g. because their origins, assets, professional activities, etc. are found all over the world, the country chooses not to tax their global income, in order to reap the indirect benefits of their established presence in this country.

In order to enjoy these tax benefits, one must pay an amount of 100.000,00€ per year. This amount may seem large, but for the targeted groups is of particular interest, given the economic benefit it brings. In fact, since there is no tax scale and the amount of tax is stable regardless of income, the higher the wealth the higher the benefit.

According to the above-mentioned Government Gazette for the Greek non-dom program, those who are interested in transferring their tax residence to Greece, must meet the following conditions:

- To make up to three distinct investments of total amount of more than 500.000,00€

- Weren’t Greek tax residents in the previous 7 out of the 8 last years from the time they transferred their residency in Greece.

- To pay tax of 100.000,00€ per year and additional 20.000,00€ for each family member, regardless of property/belongings and incomes.

If they meet the above conditions, the interested parties submit the relevant application and become "Greek tax residents”, without being taxed on their global incomes and property/belongings, while they will be able to maintain this status for up to 15 years, paying 100.000,00€ per year.

Prerequisite for integration into the scheme is the taxpayer to prove that he/she or a relative or a legal entity in which he/she has the majority of stocks or shares, carries out a maximum of 3 separate investments, of a total amount that cannot be less than 500.000,00€. The taxpayer is obliged to maintain the investment in Greece for the entire period of affiliation in the provisions of article 5A of law 4172/2013, which may last up to 15 tax years.

The following specific investment categories are set to be eligible:

- Acquisition of real estate in Greece (purchase or construction).

- Purchase of existing or creation of new fixed facilities for conducting business activity through a sole proprietorship.

- Acquisition of participation shares in a company, not listed on a regulated market.

- Purchase of Greek Government Bonds with residual maturity of at least 3 years at the time of purchase.

- Capital contribution for participation in an Alternative Investment Organization which is established in Greece and is supervised by the Hellenic Capital Market Commission (AEEAP, AKES, EKES) or whose Administrator is registered in the Hellenic Capital Market Commission.

- Purchase of securities that are traded in regulated markets.

The application for inclusion is submitted to the Tax Office for Residents Abroad and Alternative Taxation of Domestic Tax Residents and is forwarded to the Directorate of Foreign Funds, Department of Intragroup Services and Direct Investments, the General Directorate of Private Investments of the Ministry of Development and Investments, that is responsible for ascertainment of the implementation of the investment and for monitoring the maintenance of the investment.