Am I Eligible for the 50% Tax Break in Greece?

Introduction of the Tax Regime for Foreigners

Since the start of 2021, a new tax regime presented by the Greek Law 4758/4.12.2020, was introduced by the Greek government to attract global executives, employees, business owners and angel investors who want to relocate to Greece. Depending on their eligibility, this special tax regime means that foreign individuals would benefit from a 50% income tax break on their annual Greek salary or business income over a period of seven years following their relocation.

Am I Eligible For the 50% Tax Break?

For tax years beginning after the 1st January of 2021, expats transferring their tax residency to Greece can benefit from a 50% tax reduction with regards to their income from salaried employment, as well as from business activity carried out in Greece.

This favorable taxation plan is only applicable if the individual:

• Was not a Greek tax resident for the previous five of the six years prior to the transfer of one's tax residence to Greece.
• Transfers one's tax residence from an EU member state or EEA country or from a country with a valid taxation agreement established with Greece.
• Is employed by a Greek legal entity, or with a permanent establishment (PE) of a foreign company in Greece.
• Declares that they intend to stay in Greece for at least two years.

What Benefits Can I Get?

For an individual who successfully applies for the special tax regime in Greece, they:

• Become a Greek tax resident under this special tax regime;
• Become exempt from paying income tax and solidarity tax on 50% of their Greek employment income or freelancer income;
• Is taxed in Greece for any other Greek or foreign income according to the general tax rates (with a right to receive a foreign tax credit for taxes paid abroad on certain conditions etc.); and
• Become exempt from the application of local tax rules on annual imputed income deriving from ownership or possession of a residence or a private use vehicle.
  • "Imputed income" refers to income that is not actually received in cash but is assigned a monetary value for the purpose of taxation or accounting. This includes:
    • Employee Benefits: Non-monetary compensation such as company cars, housing allowances, or meals provided by an employer.
    • Owner-Occupied Housing: Homeowners may impute rental income from their own property, which is then included in their taxable income.
    • Government Services: Services provided by the government that have a monetary value but are not paid for directly by the recipient (e.g., subsidized healthcare or education).

How Long Does the Tax Exemption Last ?

This tax exemption expires after a total of seven tax years, with no possibility of further extension.

Tax Incentives for Angel Investors

Starting July 29, 2020, individuals can deduct 50% of their capital contributions to registered start-ups from their taxable income for that year.

This applies to bank deposits up to EUR 300,000 annually, spread across up to three start-ups, with a maximum of EUR 100,000 per start-up. If an audit reveals the contribution was made solely for tax benefits, a fine equal to the tax benefit will be imposed.

Conclusion

The introduction of this tax regime seems designed to entice Greeks who left during the debt crisis to return home and to attract foreign talent and skilled professionals to move to Greece.

Additionally, this new tax reduction might appeal to investment banks looking to open or expand offices in Greece to strengthen their presence in the Eurozone, as well as other companies aiming to relocate their employees to the country.

Are you eligible? We provide tax consultations from our international tax specialists to help you apply for this special tax regime. To find out more, book a 15-minute discovery call to learn more about our services.