Finance Ministry introduces incentives for foreign pensioners in Greece

Finance Ministry introduces incentives for foreign pensioners in Greece

The Greek government is proposing a 7% tax rate on foreign retirees who move their tax residence to Greece. It is worth noting that for this year’s income, and based on the new scale in force since January 1, 2020, a Greek pensioner receiving 1,667 euros per month (annual income of 20,000 euros) is required to be taxed at 900 euros for the first 10,000 euros and an additional 2,200 euros for the remaining 10,000 euros. On the contrary, the foreign pensioner who will move their residence to Greece will be taxed at 1,400 euros. This amounts to what a Greek taxpayer of 1,035 euros per month pays today.

The layout

In particular, the Ministry of Finance is preparing to address the imposition of independent taxation at a rate of 7% for foreign retirees on their total income earned abroad. The relevant provision is included in a bill the ministry posted in Diavgeia for public consultation where, among other things, the criteria for changing the business tax are described, such as e.g. branch criteria (tourism), demographics (small islands and villages), age (individual businesses of entrepreneurs over 62 years old) or even corporate (cooperatives). The same bill also promotes changes in the calculation of vehicle registration taxes, but also changes in the way of taxation for the provision of shares by companies to their employees.

With regard to the provision of shares, a new framework of free provision of shares by companies to employees is provided through taxation as income, with a fixed rate of 15%, the goodwill that the employee will gain from the sale.

Business Tax

With regard to the categories of taxpayers exempt from the business tax, the provision states that “commercial enterprises and self-employed persons who operate in villages with a population of up to five hundred inhabitants and on islands with less than three hundred thousand inhabitants are exempt from tax obligations, unless they are considered tourist sites. Individual commercial enterprises and the individual exercise of a free profession are also exempt, provided that five years have not elapsed since operations first commenced, as well as the cases of sole proprietorships, as long as the trader will be retiring in three years. Retirement year means the 65th year of age. /ibna