By providing helpful tax treatment on their overseas income, the Greece non-dom tax regime aims to draw in foreigners looking to relocate their tax residency to the country.
This tax system will be the focus of this post, especially the one applied to expats. There’s also a Greek non dom tax rule for pensioners that we’ll talk about in a different post.
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Greece Non-Dom Tax Regime Overview
An advantage for high-income earners is that foreigners who are eligible for the Greek non-dom tax regime can incur a yearly flat tax worth 100,000 euros on all income received overseas, regardless of the overall sum of income. It is applicable for 15 years, max.
Family members can sign up for the regime for an extra 20,000 euros flat tax each.
When opposed to Greece’s progressive tax rates, which can hit up to 44%, this flat tax offers significant savings.
Wealth transfers can occur without additional tax burdens because non-domiciled residents are also excluded from inheritance and gift taxes on overseas assets.
Greek Flat Tax Rate Eligibility
So as to be eligible for the Non-Dom Tax Structure, a person must have moved to Greece and not been a tax resident for at least seven of the previous eight years.
They must also submit an application for non-dom status and must invest at least 500,000 euros in Greece within three years of submitting their request.
This investment can include stocks and interests in legal businesses, movable property security, and real estate.
Pros and Cons of Greece Non-Dom Tax Regime for Expats
Benefits of Greek Non Dom Program
- No matter how much is made overall, foreign-sourced income is liable to a fixed annual tax for expatriates. For those with substantial wealth, this is especially beneficial because progressive tax rates can surpass 40% in many nations.
- The regime lowers administrative difficulties and the possibility of tax-related disputes by doing away with the requirement to register overseas income in Greece.
- The exemption from IHT and gift taxes on foreign assets for non-domiciled residents facilitates the transfer of wealth without imposing extra taxation.
- The system also benefits family members, facilitating relocation while providing comparable tax benefits.
- For foreigners who decide to settle in Greece, the special system offers long-term tax advantages for up to 15 years.
- The need to invest in Greece can improve overall financial stability by opening up worthwhile opportunities in a developing market.
- Since the regime has no effect on current dual tax deals, foreigners may be able to lower their overall tax bill by subtracting foreign taxes from Greek obligations.
Disadvantages of Greece Non Dom Tax
- Some interested expats may not be eligible since they must not have been Greek tax residents for seven of the previous eight years in order to enroll.
- Some people may find the investment minimum to be a major obstacle, particularly if they lack the necessary funds or are ill-equipped to make such an investment.
- The application needs meticulous documentation and deadline observance, which can be difficult for some foreigners. It must be submitted by March 31 of each year.
- Individuals run the risk of losing their non-dom status and being impacted by general provisions when they fail to pay the entire flat tax due in a given year.
- Despite the regime’s advantages, it raises questions regarding future tax owed when the 15-year term ends.
- Under this arrangement, people must spend more than 183 days a year in Greece to maintain residency, which may limit their ability to travel or reside abroad without further taxation in other nations.
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