Back to top
08 December, 2020

In the making of a new “toolkit” of tax incentives.

In the general context of recent economic reforms in the Greek legislation, a key focus is being paid on the introduction and implementation of “smart” policies related to tax incentives.

A) This effort was initiated with the enactment of Law 4646/2019 setting up the “non domiciled” tax-status (or “non dom”) legal framework. Aiming at attracting high net worth individuals foreign taxpayers as potential new investors, this piece of legislation provided for favorable tax treatment with respect to income generated outside Greece.

The benefits arising from the above-mentioned legal framework are the following: First of all, the Non-Dom Greek Tax Resident’s tax liability for its foreign-sourced income is limited to the payment of an annual flat tax of €100.000. Their Greek-sourced income will be taxable in accordance with the standard tax rules applicable to Greek tax residents. In addition, the Non-Dom Greek Tax Resident is exempted from Greek tax rules on inheritance or donation in relation to its foreign based property. The Non-Dom tax status applies for 15 years as of the transfer of the applicant’s tax residence. Lastly, the applicant may request the extension of the Non-Dom tax status to any of its close relatives, by paying annually an additional flat tax of € 20,000 and at the same time tax rules on donations, inheritance and parental provisions do not apply.

The applicant shall substantiate (either individually or through a controlled legal entity or through one of its close relatives) investment in Greece of a total minimum amount of €500.000 within a period of 3 years as of the date of application. The investment may take the form of real estate, business, or shares or other securities in legal entities based in Greece. It should be noted that individuals who have qualified for the Golden Visa program may also qualify for the Non-Dom Tax regime without having to fulfill the above-mentioned prerequisite.

B) In the same context,  Law 4758/2020 which among others provides for the introduction of a new article 5C on Law 4172/2013 Income Tax Code, focuses on offering tax incentives to physical persons as a means to attract individuals (both Greeks based abroad as well as foreign taxpayers that will work either as employees or self-employed) in order to transfer their tax domicile in Greece.

The scope of this legislation is firstly to reverse the so-called “brain drain” by attracting Greeks from abroad to return back home, a decision in which a friendlier tax regime is envisaged to be the catalyst. Moreover, such legislative initiative aims at responding to the newly digitalized working conditions (arising from the pandemic) and more specifically, to target the so-called ‘Digital Nomads’, namely people who are location-independent and use technology to work remotely for a company or clients based in other countries. An additional factor that the bill takes into consideration is, of course, Brexit and its repercussions to the business world as the transition period will end on 31st December, 2020 and the United Kingdom will leave the EU’s single market and customs union.

Greece currently applies a tax rate of 44% for earnings over 40,000 euros. The bill provides that 50% of the income deriving from business activity in Greece will not be taxed and the same shall apply for the “special solidarity contribution”. Moreover, an exemption from the calculation of the private car ownership and the use of incomes as evidence is also provided for.

According to Law 4758/2020, an application for the transfer of the foreign tax resident’s tax domicile must be filed by 31 July of each year.  An applicant is eligible upon specific requirements: i) not having been a Greek tax resident during the 5 out of the past 6 years before the transfer of its tax residence to Greece; ii) transfer of the tax residence from an EU or EEA (European Economic Area) Member State or from a country with which Greece has a bilateral administrative cooperation agreement on tax matters; iii) provide services in Greece in the context of an employment relationship within the meaning of paragraph 2 of Article 12 of the Income Tax Code either at  a domestic legal entity or at a permanent establishment of a foreign company in Greece;  iv) declare that will remain in Greece for at least two years. It should be note, that offices established pursuant Law 89/1967 also fall within the scope of the above-mentioned provisions in particular within the notion of permanent establishment of a foreign company in Greece. Therefore, physical persons that work in these offices are also eligible to apply for the transfer of their tax residence in Greece. The new provisions will enter into force on January 1st, 2021.

When examined together, the above constitute an overall legal framework providing significant tax incentives in order to motivate individuals from different backgrounds to transfer their tax-domicile in Greece and thus to encourage the business activity and the competitiveness of the Greek economy.


An Article by: Sotiris Foteas (Partner), Costas Fatsis (Associate), Myrto-Amaryllis Lappa (Trainee Lawyer) and Evagoras Drakos (Trainee Lawyer). 


102, Vas. Sofias Avenue, Athens 115 28
+30 210 33 92 600