Note: There is no “retirement visa” in Greece. The 7% flat tax rate is a tax program for foreign pensioners who decide to live in Greece. You may or may not be an EU-citizen. There is no investment requirement, either. You can just rent or buy a house and take advantage of this program. You do need to get a relevant residence permit in Greece. The Greece Golden Visa program gives you exactly that ability to get a residence permit.
- Greece is working on a flat rate for foreign retirees and digital nomads; although the rate is not clear yet, it may be as low as 7%
- 2021: New Tax Incentives for non-Greek resident to move their tax residence to Greece: the incentives and who can benefit
- Annual Fixed Tax payment of 100,000 Euros with a start-up investment of 500.000 Euros
The 7% Flat Tax Rate Applies to All Foreign Income
Greece’s new tax law targets pensioners with an advantageous scheme. Athina Kalyva, head of tax policy at Greece’s Ministry of Finance explains, “The logic is very simple: we want pensioners to relocate here, we have a beautiful country, a very good climate, so why not? We hope that pensioners benefiting from this attractive rate will spend most of their time in Greece, that would mean investing a bit – renting or buying a home.”
The crucial aspect of the new law is that it applies to all foreign income. The different forms of income are not subject to alterations in the rate. Alex Patelis, the economic advisor to the president Mitsotakis says, “The 7% flat rate will apply to whatever income a person might have, be that rents or dividends as well as pensions.”
Greece’s Job Market Will Not Be Affected by the New Law
To start with, Greece does not allow pensioners from every country to apply for the new scheme. The law only applies to the citizens of countries that have double taxation treaties with Greece. Thus, the scheme establishes trust in terms of due diligence from the start.
Also, since the scheme is specifically for retirees, it will not damage the job market. The beneficiaries of the law will not participate in the job hunt. So, foreign pensioners will not compete with Greek citizens for employment. Instead, they will bring money into the Greek economy. Patelis explains, “Pensioners, by definition, don’t work, so there’s no competition with the domestic labor force. On the contrary, they will be here spending money.”
Post-Pandemic Market Demands Foresight
This new form of tax law is not entirely original. Spain and Portugal have similar tax schemes for retirees. However, since Covid-19 changed everything, countries now alter their programs accordingly. Authorities tend to gravitate towards what they believe will be more profitable after Covid-19. Patelis remarks that “once the pandemic subsides, we believe capital and labor will move to places that did relatively better.”
Read more about investment in Greece.