New tax motives for foreign pensioners in Greece

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In the context of reshaping the tax legislation in Greece towards the attraction of foreign capitals, a new tax provision regarding foreign pensioners has been introduced for individuals who wish to decrease their taxation.

More specifically, Greece is asking for interested individuals to deposit a yearly tax of up to 7% to our country, for incomes that are acquired abroad. The individual shall deposit a tax calculated with a 7% ratio per each tax year, on the total income which emerges abroad, while the tax of 7% is not imposed on amounts which are exempted from taxation in the country of residence, pursuant to provisions of Double Income Taxation Agreements. Finally, a tax potentially deposited from the taxpayer abroad for incomes covered by the alternative taxation is exempted from 7% tax, as long as it is either predicted by the Double Income taxation agreements in both countries, or a Double Income Taxation agreement does not exist with the country-source of income.

More specifically, the procedure described in the decision cumulatively defines the following conditions:

a) the individual shall not be a tax resident of Greece for 5 out of 6 years before the transfer of the tax residence in Greece. This is automatically proven when issuing a Tax Registration Number (TRN) in the country for the first time or if in the already existing Tax Registration number (TRN) the individual appeared as a foreign resident

b) the individual shall transfer the tax residence from the country which is in a valid agreement with Greece regarding administrative co-operation in the taxation field

c) in order to prove that the individual bears the capacity of income beneficiary from pensions abroad, the submission of any document by the insurance entity or any other public authority or the professional fund or insurance company is necessary, from which it emerges that the deposit was completed abroad, from the main and supplementary entity of mandatory insurance, from professional funds which have been established pursuant to a law, or the deposit of insurance amount (either in one installment or with several) in the context of group insurance pension contracts.

d) upon the approval of the application for the tax residence transfer, the individual is established as a Greek tax resident for the tax year on which the application is submitted and for fifteen (15) tax years in total, and he/she appoints a residence address in Greece.

e) there is no obligation for the individual to stay in Greece for a specific minimum time period

f) the individual may, at any tax year during the predicted 15-year period, submit an application to revoke the transfer of his/her tax residence in Greece