Moving to Greece as a pensioner has always been popular and the recent tax benefits will definitely increase the reason for moving to Greece. From June 2020, Greece will offer a 7% taxation of pension income. What you need to know about the terms and conditions of eligibility?
How foreign pensioners can pay tax in Greece
September 30 2020 Prokopis Hatzinikolaou wrote in ekathimerini.com:
“On Wednesday the Finance Ministry finally issued the decision on the terms and conditions of eligibility, although the deadline for applications regarding the 2020 financial year (to become a resident in 2021) expired on Wednesday too. Still, ministry sources say an extension will be granted and those wishing to apply from this year will probably have until the end of 2020 to do so.
The following three eligibility criteria will apply for pensioners from abroad to secure tax residence in Greece with a flat income tax rate of 7% for the next 10 years:
1) They should not have been Greek tax residents for any more than one of the last six years.
2) They must shift their tax domicile from a state with which Greece has a valid agreement for administrative cooperation on tax issues.
3) To prove that they are recipients of pensions from abroad, they must produce any document from their social security fund or another public authority or professional fund or insurance company that illustrates the payment of a state or private pension abroad.
Any individuals who meet the criteria for the new program and have already shifted their tax residence to Greece since 2019 will need to submit their income tax declaration for the 2019 financial year by October 31, 2020. In this case the 7% tax will be paid in a lump sum within a month of the approval of their application to enter the program – i.e. by November 26.
The tax that foreign pensioners have to pay will come due in one tranche each tax year, with the deadline set for the last working day of July”.
Will Greece be the new tax haven for pensioners in Europe?
To date, Portugal, Malta, Italy and Cyprus have been the main EU Member States to introduce special tax incentives for foreign pensioners, and to a lesser extent Romania and France. From June 2020, Greece will also offer a 7% taxation of pension income and maybe become the new haven for pensioners in Europe? Read an interesting article from The Guardian: “Sun, sea, safety: Greece woos Europe’s pensioners with 7% income tax rate”.