The first important initiative was taken with the Law 4646/2019, which introduced in Greece the institution of the “non-domiciled tax resident” (Non-Dom tax regime). This institution gave the option to individuals, who are tax residents abroad, to be able to transfer their tax residence to the country. It shall be required for them to make an investment of at least € 500,000 in Greece. The alternative tax regime (Non-Dom tax regime) dictates that the investor shall pay a fixed annual tax (Flat tax rate) of one hundred thousand (100,000) euros, regardless of the total income of the applicant abroad. This favorable tax scheme can be applied for a maximum period of 15 financial years.
Next, it is worth referring to the Law 4714/2020, which extended the alternative income taxation to retirees abroad, who shall transfer their tax residence to Greece. In short, individuals – pensioners of abroad are given the opportunity to transfer their tax residence to Greece and be taxed for their global income in Greece at a rate of 7%.
In addition, the Law 4758/2020 established tax incentives to attract foreign workers and the self-employed from abroad, as well as Greeks who left the country during the financial crisis, to transfer their tax residence and work in Greece. Specifically, there is an exemption from income tax and from the special solidarity contribution for 50% of their income from paid work and business activity for 7 years, provided that this income shall be generated in the country for these individuals.
Recently, the Law 4778/2021 introduced a new legal framework, which provides incentives for the establishment of special purpose companies for the management of family property (Family Offices) in Greece. In short, Family Offices are legal entities that manage family property. According to the Law, these Family Offices in Greece must employ a staff of at least 5 people within 12 months from their establishment and onwards. Also, Family Offices must incur operating expenses of at least 1,000,000 euros per year. The gross income of Family Offices will be determined using the cost method (including all types of expenses and depreciation, except income tax) plus a profit margin of 7%, while the tax is calculated at the current rate.
Finally, in the previous days, the Joint Ministerial Decision was signed, which describes the terms and conditions for the determination of a taxpayer – an individual as an “Investment Angel”.
The above-mentioned decision determined the process, time and characteristics of the capital contribution, the process of deduction from the taxable income of the “Investment Angel”, the conduct of audits to verify the observance of the obligations of the “Investment Angels” and the start-up companies regarding the correct application of article 70A of the Law 4172/2013, as added by the provisions of article 49 of law 4712/2020.
According to this decision, the Investment Angel (namely an individual in Greece or abroad, with a Tax Identification Number in Greece) will have the right to deduct from his taxable income a sum equal to 50% of the amount of the capital contribution allocated to a start-up company. Each individual has the opportunity to invest up to 100,000 euros per start-up company and up to three per year, i.e. up to 300,000 euros per year. The start-up company must be registered in the National Register of Start-ups – Elevate Greece.
The above mentioned incentives are just some of the initiatives taken by the Greek State in order to improve the economic climate and strengthen the competitiveness of our country abroad. The above mentioned initiatives confirm the fact that the government is demonstrating its strong intention to attract investment and investors in Greece.
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