Flat 7% Tax on Foreign Income: Greece’s Attractive Offer for Retirees

Besides the stunning landscapes and Mediterranean climate, Greece offers more than just a superb quality of life for retirees and pensioners from across the globe. Greece provides attractive tax incentives for foreign pensioners, making it a highly appealing destination for those looking to enjoy their golden years.

As of July 31, 2020, new legislation allows retirees to pay a flat annual tax rate of 7% on foreign-sourced income. This simplified tax regime significantly reduces the tax burden for retirees, allowing them to retain more of their income and enjoy a comfortable lifestyle in one of the world's most beautiful countries.

Eligibility Criteria

To qualify for this favorable tax regime, pensioners must meet specific criteria:

1. Residency History: Applicants must not have been Greek tax residents for five out of the six years before moving their tax residence to Greece.
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2. Tax Residence Transfer: They must transfer their tax residence from a country that has a tax cooperation agreement with Greece.

This tax regime is not just limited to a flat 7% tax on foreign income. Greece also offers other financial advantages that make it an even more attractive option for retirees and investors alike:

• 0% Capital Gains Tax: Investors and retirees can benefit from a 0% capital gains tax, which means that profits from the sale of investments are not subject to taxation.
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• 5% Dividend Tax: Dividends earned from investments are taxed at a low rate of 5%, providing an additional incentive for those looking to invest their savings.

Additional Benefits

Living in Greece offers numerous other advantages beyond tax incentives. The country is known for its rich history, vibrant culture, and friendly locals. The cost of living in Greece is relatively low compared to other European countries, allowing retirees to stretch their pensions further. Additionally, the healthcare system in Greece is of high quality, with both public and private options available to residents.

Retirees in Greece can enjoy a slower pace of life, with plenty of opportunities for outdoor activities such as hiking, swimming, and exploring ancient ruins. The Mediterranean diet, known for its health benefits, is a staple in Greek cuisine, contributing to a healthy lifestyle.

Residency Programs

Before making the decision to move to your retirement destination, it is important to understand the different types of residency programs that exist in Greece.

For EU citizens

In order to become a legal tax resident of Greece as a member of the EU, retirees must obtain the EU card, which allows them to transfer their tax residency from their country of origin (or other) to Greece. Read how to obtain EU residency here as an EU citizen in Greece.

For non-EU citizens

For third-country nationals, retirees must choose between a selection of residency programs, depending on their budget and needs.

1. FIP Residency: The first residency program to choose from is the Financial Independent Person's Visa or FIP, which allows retirees and pensioner from non-EU countries to stay in Greece for up to 3 years and is easily renewable. Check your eligibility requirements here.
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2. Golden Visa: Alternatively, you can opt for the Golden Visa program, which requires making a property investment. Effective August 31, the minimum investment amount for the Golden Visa has been raised to €800,000 in most regions of Greece. Read more about this here.

A Strategic Decision

Choosing Greece as a retirement destination is an ideal choice for many pensioners. The combination of favorable tax laws, a welcoming environment, and the potential for a high quality of life makes it a great place to retire. Moreover, the country’s location provides easy access to other parts of Europe and beyond, making it convenient for retirees who wish to travel around Europe.

In conclusion, Greece’s flat 7% tax on foreign-sourced income, along with other tax benefits and the allure of a Mediterranean lifestyle, makes it an attractive destination for retirees from around the world.

Are you ready to make Greece your retirement destination? Click this link to schedule your complimentary 30-minute consultation call.