Greece will offer tax incentives to lure wealthy individuals to move their tax residence to the country as part of draft legislation on tax relief set to be announced on Thursday, a senior government official said.
Greece’s conservative government is keen on attracting investments to boost the recovering economy’s growth prospects.
Tax relief included in the draft legislation will include a cut in the corporate tax rate to 24% from 28% and lowering the tax rate on dividends to 5% from 10%.
The so-called non-dom programme will offer qualified wealthy investors who opt to shift their tax residence to the country a flat tax of 100,000 euros ($110,710) on global incomes earned outside Greece annually.
“The tax incentive will run for a duration of up to 15-years and will include the benefit of no inheritance tax for assets outside Greece,” a senior government official told Reuters.
One of the requirements to qualify will be residing in the country for at least 183 days per year and making an investment of at least 500,000 euros within three years.
“The investment can be in real estate, stocks or bonds. If the investment reaches 1.5 million euros then the flat tax is cut by half,” the official said.
Investments of 3 million euros will reduce the flat tax to just 25,000 euros. There will also be a grandfathering clause protecting investors from policy changes by future governments.
“Once you’re in the programme, you’re in. A future government cannot get you out,” the official said.
The government’s rationale is that the tax incentive can entice deep-pocketed investors, including shipping magnates, to take up the offer and move to Greece, boosting investments.