Tax halved for those who return to Greece

Τhe invitation addressed by the government to workers and professionals abroad to move to Greece for tax purposes goes along with a “haircut” of 50% of income tax and the special solidarity contribution, for seven years, and complete exemption from the presumption (on maintenance costs and acquisition of assets) of residence or car. The Ministry of Finance, using low taxation as an incentive, is trying to convince Greeks, especially young people and scientists, who emigrated during the years of economic crisis and the Memoranda, to return to their country.

The decision signed by the Deputy Minister of Finance Apostolos Vesyropoulos and the Governor of AADE, George Pitsilis, determines the terms and conditions of the tax invitation. Particularly:

1. Those who decide to transfer their tax residence to Greece must submit an application by September 30, 2021.

2. A natural person who transfers his tax residence to Greece is subject to the reduced tax regime if cumulatively:

a) was not a tax resident of Greece for the previous five of the six years prior to the transfer of his tax residence to Greece;

b) transfers his tax residence from an EU Member State. or a state of the European Free Trade Association or a state with which an administrative cooperation agreement in the field of taxation with Greece is in force,

c) provides services in Greece in the context of an employment relationship exercised either with a domestic legal entity or the legal entity of a foreign company with a permanent establishment  in Greece; and

d) declares that he will remain in Greece for at least two years.

3. Especially for the applications for inclusion in the special way of taxation from paid work and business activity that arises in the country, which will be submitted within the year 2021 and concern the assumption of service or start-up of a sole proprietorship until July 31, 2021, the deadline for submission of the relevant application and accompanying supporting documents is set until 30 September 2021.

4. The applications are examined by the Tax Office for Residents Abroad and Alternative Taxation of Domestic Tax Residents. The decision is issued by November 30, 2021.

5. Applications submitted after 30-9-2021, are accepted and examined in order to include the taxpayer in the special taxation of income from paid work and business activity that arises in the country for the next tax year.

6. Individuals who have already transferred their tax residence to Greece and have concluded employment contracts or have started work within the tax year 2020 can apply for inclusion in the special taxation method from paid work and business activity that arises in the country  if they were not tax residents of Greece in the years 2015 to 2019. For these persons, if they have undertaken paid work or have started work before the law that was passed (4-12-2020), the employment contract does not have to be accompanied by the responsible declaration of the employer For the specific individuals, even if they took a job in the tax year 2020, their inclusion in the special tax method will begin for the income obtained from 1-1-2021 onwards, and the person’s intention to stay in Greece for two years starting from 1-1 -2021 must be stated, through a responsible declaration is required.

7. Applications shall be accepted even if they are not accompanied by the original relevant supporting documents at the time of their submission, provided that a responsible declaration is submitted by which the taxpayer declares that he meets the conditions and that he is unable to submit them in the prescribed manner, and in international legally, due to the fact that the respective services are suspended or limited in their operation due to the consequences of the COVID-19 pandemic. The taxpayer is obliged to submit the supporting documents, in order to complete his file, in a reasonable time and no later than November 22, 2021.

8. Those who meet the criteria and transfer their tax residence to Greece will pay half the income tax for a period of seven years.These favorable provisions may not be extended beyond seven tax years.

9. Natural persons subject to the favorable regime are excluded from the presumption of residence or passenger car for private use.