According to the new tax law that provides tax incentives for foreign pensioners and will be applied from 2021, will enable individuals pensioners from abroad to be subject to a favourable taxation of their income.
Every tax year, individuals will pay tax at a rate of 7% on their foreign-sourced income, with exhaustion of the tax liability for this income. The tax is paid each tax year in 1 instalment until the last working day of July and cannot be offset against other tax liabilities or any credit balances.
To be eligible for this new regime, individuals must, cumulatively:
- not have been Greek tax residents for the previous 5 of the 6 years prior to the transfer of their tax residence to Greece; and
- transfer their tax residence from a state with which an agreement on administrative cooperation in the field of taxation with Greece is in force.
The application for the tax residence transfer and submission to this regime is submitted by the pensioner until 31 March of the respective tax year.
Pensioners subject to this new tax law are required to declare their income earned both in Greece and abroad. Furthermore, non-payment of the entire amount of tax due in one tax year results to the application of the general provisions of the ITC for the taxation of their global income from the relevant tax year onwards.