Greece’s 7% Tax on Foreign Income Scheme – An Attractive Proposition for Retirees in Greece

Greece has many attractive investment schemes – not to mention beautiful islands, stunning landscapes and the world-famous Mediterranean diet. One of the tax schemes that our independent accounting and taxation partners have strong experience in is the 7% tax on foreign-sourced income scheme.

This is an attractive scheme for eligible retirees and pensioners from across the globe and puts Greece in a strong position on a global level for people looking for a tax-effective destination to enjoy retirement.

The relevant legislation was introduced on July 31, 2020, and enables eligible retirees who transfer their tax residence to Greece to pay a flat annual tax rate of 7% on their qualifying foreign-sourced income for up to 15 tax years. This can be a significant reduction in terms of tax burden for retirees – and helps retirees from around the globe, such as the UK and the USA, to potentially retain more of their income for daily expenditure and general enjoyment, subject to applicable tax treaties and individual circumstances.

How do I know if I’m eligible for the Greek 7% Tax on Foreign Income Retirement Scheme?

You need to receive qualifying foreign pension income and meet specific criteria for this tax regime, including:

Not having been a tax resident in Greece for at least five out of the previous six years before the year you transfer your tax residency to Greece.
Transferring your tax residency to Greece from a country that Greece has a tax cooperation agreement with. Speak to our team to check if your country has a tax cooperation agreement with Greece.

Greece has other tax provisions which may also apply and be advantageous, including:

Capital gains tax exemptions. Certain capital gains may be exempt from tax, depending on the asset and applicable legislation. However, capital gains are not universally tax-free in Greece, and a 15% tax rate applies to certain taxable gains.
A low dividend tax rate of 5%. This is useful for investing your savings, as this is a particularly low standard rate on dividends under the general Greek tax rules. The treatment of foreign dividends under the 7% regime requires separate consideration.

Why retire in Greece?

The reasons are endless and differ from person to person. However, some of the benefits of retiring in Greece aside from the tax advantages include:

Greece has a rich history with many archaeological sites to explore.
Greece caters for high-end retirees.
There is a relatively low cost of living compared to many other parts of Europe.
Greece has a high-quality healthcare system.
Greece is well connected globally.
Greece has lovely cuisine.
There are lots of travel options within Greece, as well as islands such as Crete and Rhodes that are large enough to live on comfortably.

Options for becoming a Greek resident

EU Citizens:

The residency process is quite simple for EU citizens. There are generally fewer residency restrictions, and you may need to obtain an EU citizen registration certificate if staying in Greece for longer than three months, subject to the applicable requirements. This is separate from transferring your tax residency, which must be addressed through the Greek tax authorities.

For non-EU citizens

There are a few options for residency that suit foreign nationals from non-EU countries, including:

FIP Residency: This is the Financially Independent Persons residence route and allows eligible individuals to reside in Greece, subject to the applicable permit duration, financial requirements and renewal conditions. The process is relatively straightforward for applicants who meet the requirements.
Golden Visa: This is a residency-by-investment scheme. There are specific minimum investment requirements which our team is able to help you understand and coordinate through independent qualified professionals.

Are you considering retiring in Greece under the 7% foreign tax resident scheme?

There are many factors to consider. Based on the retirees we have assisted from the UK (England), Iran, Israel, the United States, Canada and other countries, including countries within the EU such as Denmark, we have noticed some trends in terms of the reasons retirees take up the 7% foreign tax incentive:

For pure tax purposes: From a pure tax perspective, Greece is a great place to base yourself. Eligible retirees can take advantage of the 7% foreign tax resident scheme and travel extensively, provided they satisfy the applicable Greek tax residency requirements. Spending more than 183 days in Greece during a relevant 12-month period is one way tax residence may be established, although other criteria and exceptions also apply. The scheme can offer substantial savings on tax, and there are many cost-effective places to live that are attractive. A key advantage is that Greece has agreements in place with many countries across the globe, so there is a good possibility, depending on the country you are from, that Greece will have an agreement with your respective country. Speak with our team to see if you may be eligible. Also, the cost of living is generally quite low in Greece, and therefore it makes sense to consider retiring in Greece.
An additional benefit for people in love with Greece: Many of our clients fall in love with Greece and often a specific region such as Crete, Rhodes, Santorini or Athens. They dream of retiring in Greece and enjoying the Mediterranean climate. The main issue here is residency, and that’s an area our consultancy team assists with, in collaboration with independent legal and immigration professionals. The special tax regime is merely a ‘bonus’ and a handy additional outcome to help you enjoy your retirement in Greece.

How can our team help you take advantage of the special tax regime for retirees?

Our independent tax and legal partners are able to guide you through the application process for the 7% tax incentive. They will work with you to assess whether you are eligible and ensure that you meet the requirements for residency as well as the tax regime. Tsaks Consulting provides business consultancy, administrative assistance and coordination with these independent professionals.

Enquire with our team today to discuss how we can assist.

Client testimonials

We wanted to get all of our tax issues and eligibility for incentives organised before we moved to Greece. We had read a little bit about the 7% tax regime, as well as the family office regime and a number of other incentives. We engaged the team at Tsaks Consulting for help, and they were great. We dealt directly with one of their accounting partners who took us through all the different options for our situation. This was great, firstly because some of the potential regimes in Greece we thought we were eligible for, we weren’t, and secondly because we were able to identify some other tax-effective ways to move to Greece. It was a good experience, and they offer a very detailed, concise and focused service.

Terry B | Private HNW Individual | Athens and Chicago

If you are looking for a firm to assist you in checking your eligibility for and applying for the 7% tax regime in Greece, then speak to Tsaks Consulting. They are experts in Greek regulation. Their accounting partners are experienced and highly focused. They are highly professional and experienced.

Dimitri P | Private Individual | Crete and Ireland

Important Clarification

Tsaks Consulting Greece is a business consultancy and does not operate as a law firm or accounting practice. We provide consultancy, administrative assistance and coordination services, working with independent accountants, lawyers and other appropriately qualified professionals who provide specialist tax, accounting and legal services.

Eligibility for the Article 5B regime depends on the applicant’s circumstances, the relevant legislation and applicable international tax treaties. Information provided is general in nature and does not constitute individual tax, financial or legal advice. Requirements and procedures may change and should be confirmed with a qualified independent professional.