06 Dec FT: Greece excludes Citizenship Programme and introduces “Non-Dom”
It has been announced that Greece will introduce a new tax law, which is aimed at attracting fresh revenues into the country, mainly from foreigners and Greeks who are taxed abroad, by relocating their tax domicile to Greece (https://www.ft.com/content/464cd2c2-16a8-11ea-9ee4-11f260415385).
The so-called “Non-Dom” Programme, which is targeted at shipowners, successful entrepreneurs and the retired, will offer a flat tax rate of EUR 100.000 for 15 years, if they live in the country for at least six months annually (https://www.thenationalherald.com/272515/greece-offers-big-tax-breaks-for-rich-foreigners-to-come/).
Under this Programme, Greece’s non-doms will have to invest EUR 500.000 in stocks, bonds or property within three years of taking up residence. There will be no inheritance tax on assets held outside Greece and a grandfathering clause will protect against changes of policy by a future government (https://www.ft.com/content/464cd2c2-16a8-11ea-9ee4-11f260415385).
Having these foreigners stay in Greece for at least 183 days a year, as the law requires, will also entail expenditure on accommodation and everyday costs that will be added to the Greek economy (http://www.ekathimerini.com/247059/article/ekathimerini/business/the-plan-for-wooing-wealthy-foreigners).
Coupled with the Double Tax Avoidance Agreements, most eligible foreigners will be able to considerably lighten their tax burden if they relocate to Greece.
The term “non-doms”, refers to individuals who will become Greek residents but claim their primary domicile in another country. Hence, they are not liable for tax on offshore income and capital gains unless the money is brought into Greece.
This move, which is put forward by the centre-right government of Mr. Kyriakos Mitsotakis, the Greek Prime Minister, highlights a drive for fresh revenues to accelerate a weak economic recovery, following Greece’s eight-year crisis (https://www.ft.com/content/464cd2c2-16a8-11ea-9ee4-11f260415385).
The Prime Minister has also ruled out the sale of Greek passports to non-EU citizens, following the recent scandal in Cyprus, in November 2019, regarding the EUR 5 million sale of a Cypriot passport to Jho Low, of Malaysian origin, who is currently involved in a multibillion-dollar international fraud.
It is important to note that an official of the finance ministry, stated that the EU and the International Monetary Fund, has not raised any objections to the Programme, and that it is line with the Organisation for Economic Cooperation and Development (OECD) rules, on countering tax avoidance.
The framework of the Programme is said to be inspired by that of Italy’s non-dom arrangement, that was so successful, it was further extended to foreign pension holders who agree to live in local communities of fewer than 20,000 people.