Flat Tax of 7% for foreign pensioners with tax residence in Greece
Greece adopts a flat tax of 7% for foreign pensioners who already have their main residence in Greece or who transfer it to Greece and declare their tax residence in Greece
The newly adopted Art. 5b of the Greek Income Tax Law, in force since 31 July 2020, provides that pensioners who transfer their tax residence to Greece will benefit from a so-called flat tax of 7% on all foreign income. This income will include not only the pension, but also other income earned by the pensioner abroad, so that a not inconsiderable tax saving can be achieved as regards correspondingly high incomes. However, regarding incomes from letting and leasing of real estate lain abroad the respective tax regulations in the country of origin of the pensioner must be considered.
In order to benefit from the Flat Tax, the following conditions must be met:
- original tax residence abroad (at least 5 years within the last 6 years before the transfer of the main residence to Greece)
- Transfer of tax residence to Greece
- Proof that you are a pensioner
- Double taxation agreement between country of origin and Greece (such an agreement exists with Germany)
The application has to be submitted to the Tax Office for non-residents until 31 March of the year in question; for 2020 (the year of entry into force of this law) the application period ended on 30 September 2020.
A similar regulation for foreign pensioners is also known from Portugal, now also Greece creates a correspondingly reduced tax framework to favor investments of pensioners in the Greek real estate market. However, the regulation can also be interesting for foreign pensioners who have already purchased a property in Greece years ago and live in Greece, but have so far hesitated to tax their income in Greece.
For your qualified advice in individual cases, the employees of AP & Generalis are always available for a consultation in Athens or Berlin and, of course, by telephone or video conference (teams, zoom, Skype).