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THE NON-DOM REGIME

The non-dom regime for HNWIs Law 4646/2019, in force as of 12.12.2019, introduced significant changes in the Greek Income Tax Code, among other, the long-anticipated non-dom regime for high networth individuals (HNWIs). According to this new Law and the Ministerial Decision which further regulates in detail the implementation of the non-dom regime for high net-worth individuals (HNWIs) who now have worth-considering incentives for transferring their tax residency to Greece. The alternative tax regime (non-dom) dictates that the investor will pay a fixed tax of one hundred thousand (100,000) Euro per fiscal year, irrespective of the total income earned abroad. This favourable regime can apply for a maximum duration of 15 years. HNWIs who choose to transfer their tax residence to Greece will enjoy the privileges of special tax treatment provided the below conditions are met: 1. The taxpayer has not been a tax resident of Greece for the past seven (7) out of (8) eight years prior to the transfer of his/her tax residence to Greece and 2. The taxpayer has to prove that either (s)he or a relative have invested at least five hundred thousand (500,000) euro in real estate or business or transferable securities or shares in legal entities seated in Greece; the investment may have been made through a legal entity in which the taxpayer holds the majority of the shares. Moreover, the individual has the right to request the extension of this regime to a family member. In that case, they will pay an additional tax of 20,000€ per relative while provisions on gifts, inheritance and parental gifts do not apply. With the payment of this fixed tax, the individual bears no further tax obligation for income earned abroad and (s)he is also exempt from inheritance or gift tax on properties located abroad.

The non-dom regime for Foreign Pensioners Following the above- mentioned introduction of the nondom reime for high net-worth individuals in Greece, the Greek Parliament voted further the Law 4714/31.7.2020 regulating the non-dom regime specifically for foreign pensioners. In brief this law stipulates that individuals, being beneficiaries of pension income arising from abroad and wishing to transfer their tax residency to Greece, are subject to an alternative method of taxation for the income that arises abroad, if cumulatively: a) they were not tax residents of Greece in the previous five (5) out of the six (6) years prior the transfer of their tax residency to Greece, and b) they transfer their tax residency from a state, which has in force an agreement on administrative cooperation in the field of taxation with Greece. If the taxpayer is accepted to be included in the alternative way of taxation for income arising abroad, then the individual shall pay, once-off, a tax at a rate of seven percent (7%) on the total of his income obtained abroad, each year. With the payment of this tax in Greece, every tax liability of the individual for this income arising abroad is considered to be paid in full.

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