7% tax for those foreign pensioners who transfer their tax residence to Greece

A new bill was passed by the Greek Parliament, and in particular article 5B of Law 4172/2013 concerning foreign pensioners wishing to transfer their tax residence to Greece.

A new bill was passed by the Greek Parliament, and in particular article 5B of Law 4172/2013 concerning foreign pensioners wishing to transfer their tax residence to Greece. An invitation to pensioners from abroad wishing to live in Greece and permanently transfer their tax residence in our country, is addressed by the Greek government. Greece is asking those interested to pay an annual tax of up to 7% to our country, for income earned from abroad. Under certain conditions, however, the charge will be lower, if, for example, a part of the foreigner’s income is exempt from tax in their country.

Conditions

In particular, the procedure described in the decision sets out cumulatively the following conditions:

(a) the person concerned should not had been a tax resident of Greece for the previous 5 of the 6 years prior to the transfer of his/her tax residence to Greece, and

(b) the person concerned must transfer his/her tax residence from a state with which an agreement on administrative cooperation in the field of taxation with Greece is in force.

If the pensioner meets the above conditions and his/her application is accepted:

–  the natural person shall pay, every fiscal year, tax calculated at a rate of 7% on the total income generated abroad

–  7% tax is not imposed on amounts that are exempted from tax in the state of residence, according to the provisions of the Convention for the Avoidance of Double Taxation – CADT.

–  any tax paid by the taxpayer abroad for income covered by the alternative method of taxation is deductible from the 7% tax if, either the right to tax is provided by the CADT in both countries, or there is no CADT with the state where the income was generated.

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