Greece: A Tax Haven for Retirees
Greece has recently emerged as a favorable destination for retirees, especially those from abroad, by offering a tempting tax incentive. Let's delve into the specifics of this fiscal paradise for pensioners.
1. The 7% Flat Tax Rate for Foreign Retirees: Greece has introduced a special tax regime for foreign retirees, mirroring similar incentives in countries like Portugal and Italy. Under this scheme, retirees transferring their tax residence to Greece can enjoy a flat tax rate of 7% on their foreign-sourced pension income. This advantageous rate is applicable for a span of 15 years.
2. The Mediterranean Race for Retirees: European Mediterranean countries are vying to attract retirees, especially those over 60, who previously considered relocating to Portugal or Eastern European nations. Greece aims to lure retirees with substantial net worth, offering them the chance to reside in picturesque locations like Mykonos, Athens, Corfu, or Patras with minimal tax burdens.
3. Eligibility Criteria: To avail of this tax benefit, retirees must meet specific conditions:
- Transfer of Tax Residence to Greece: The individual should transfer their tax residence from a country that has a tax cooperation agreement with Greece.
- Previous Tax Residence Outside Greece: The individual should not have been a tax resident in Greece for at least five out of the six years preceding their move.
- Foreign Pension Income: The benefit is exclusively for those with pension incomes sourced outside Greece.
4. Application Process: Applications for this tax scheme should be submitted by March 31st, either physically or electronically, to the relevant tax authority. Supporting documents must be provided by May 31st. The Greek tax authorities then have 60 days to make a decision. Once approved, the individual is considered a Greek tax resident for the year of application and the subsequent 15 fiscal years.
5. Exclusions for Public Sector Employees: Just like in Portugal, this 7% tax benefit is only for retirees from the private sector. Public sector retirees, such as teachers, military personnel, or other government employees, cannot avail of this scheme. They continue to be taxed at source by their respective pension providers.
6. Relocating to Greece – Things to Consider: While the tax benefits are enticing, relocating to Greece requires careful consideration:
- Climate: The intense summer heat might be a concern for some, especially those with health issues.
- Language Barrier: Living in Greece necessitates learning the Greek language, fostering better community relations.
- Relocation Costs: The expenses associated with moving and frequent travels back to one's home country should be factored in.
7. Conclusion: Greece's initiative to tax foreign pensions at a mere 7% is a strategic move to boost its economy by attracting foreign retirees. If you're considering this option, it's essential to seek expert advice to ensure a smooth transition and compliance with all regulations.
Disclaimer: Always speak directly to an attorney; blog posts are not a sufficient source of information to make decisions, may not be appropriate for your situation, may not be well researched, and may not be current at the time you read them, always speak directly with an attorney.
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