ECONOMY

Vying for European retirees

Greece competes with Portugal to woo pensioners from Scandinavia to its tax register

vying-for-european-retirees

Greece is going all out to attract foreign pensioners, having introduced some particularly favorable legislation that puts it in direct competition with Portugal and leaving Italy in the dust. Already more than 300 pensioners have shifted their tax residence to Greece, while another 1,500 are waiting.

The institutional framework put in place last year created a tax rivalry between Portugal, Greece and Italy, with the former two fighting it out and matching each other’s moves in the battle to woo mostly Scandinavian pensioners.

Italy appears to be lagging in this race for now, as its system does not appear competitive enough; it does offer advantages, but only to pensioners who relocate to specific regions, especially that are sparsely populated villages.

Portugal and Greece feature identical frameworks: Portugal offers a 10-year income tax exemption, concerning their pensions, properties securities etc anywhere in the world. Greece offers the same incentive except that it imposes a 7% tax rate. Such a rate, according to the major offices that pensioners contact, does not constitute a problem, as the benefits are multiple and the cost of living lower in this country compared to their countries of origin. They add that Greece is located in a region that serves as a great base from which to explore Europe, Africa and the Middle East.

The increased interest recorded – amid the pandemic too – has worried the Portuguese authorities, which are now considering providing extra incentives to those planning to relocate to Greece. They may even extend the exemption period from 10 to 15 years.

“They should not think we will remain idle,” says a Greek Finance Ministry source, noting that if other countries improve their systems aimed at attracting pensioners, “we will also make changes. We have the capacity to offer more, which will be determined according to developments abroad and the demand for Greece by pensioners in Europe.”

Meanwhile the Scandinavian countries appear annoyed and are trying to stem the flow of their pensioners to the European South.