The Greek government has taken a leaf out of Italy’s law book to invite wealthy individuals to move their tax residency to Greece.
A clause will be included in next month’s tax bill aimed at individuals and corporations with large deposits and offering significant incentives for registering with the Greek tax authorities.
Finance Ministry officials speak of particularly favorable timing, arguing that the threat of a no-deal Brexit could lead to a surge in interest for new tax residences outside the UK.
They add that Greece is, up to now at least, generally seen as a country that foreign investors should avoid. Besides the fact that there are no incentives for those moving their tax residence here, high tax rates act as a counterincentive even for corporations and individuals active in this country. Moreover, several major enterprises have moved their tax domicile away from Greece in recent years to find refuge from excessive taxes and high social security contributions.
The ministry examined the models applied in other countries, such as Malta, Cyprus and Portugal, before settling on that implemented in Italy. The Italian model Greece is adopting for Non-Domiciled Residents, or Non-Doms, provides for a fixed payment of annual tax of 100,000 euros on the global income of taxpayers, plus 25,000 euros per dependent family member for incomes earned outside the country.
However, for individuals or companies to utilize this clause in Italy they need to fulfill a number of conditions. They have to take up tax residency in Italy; to have been a tax resident of in other countries apart from Italy for at least nine of the last 10 years before applying for Non-Dom status; to have their application approved by the Italian tax authorities; and to have a permanent residence in Italy or be declared on the register of permanent residents in Italy for at least 183 days a year, even if those days are not consecutive.
Italian law also provides for Non-Dom status to expire after 15 years without the option of renewal. It can also be revoked if the interested party demands so, but without the option of renewing it later. Tax authorities in Italy have 120 days to approve or reject an application.