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Greece Offers Big Tax Breaks for Rich Foreigners to Come

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(Photo by Eurokinissi/Tatiana Bollari)

ATHENS - Going beyond the Golden Visa program that gives residency permits and European Union passports to wealthy foreigners who invest in Greece, the New Democracy government will offer a flat tax of 100,000 euros ($110,945) if they live in the country for at least six months annually.

The so-called “Non-dom” program is aimed at shipowners, successful entrepreneurs and the retired, said The Financial Times in a feature, with legislation set to go before Parliament on Dec. 6, setting the flat tax for 15 years for those who qualify.

Seeking foreign businesses, Prime Minister Kyriakos Mitsotakis was already planning to let rich foreigners who have no ties or heritage to Greece to buy citizenship outright while those in the Diaspora have to wait two years or more.

But he pulled back from that following a scandal in Cyprus where 26 people had their permits and passports yanked after being tied to corruption with critics said the program wasn’t vetted properly for money laundering and criminal activity.

A senior government adviser not identified told the news site that the program was “loosely based” on Italy’s non-dom arrangement that was so successful it was extended to foreign pension holders who agree to live in local communities of fewer than 20,000 people.

“We really don’t know how well our system will work. We expect some hesitation at first?.?.?.?We may end up with just a few hundred people in the early years,” the adviser said.

A Finance Ministry official also not named said that the country’s creditors, the Troika of the European Union-European Central Bank-European Stability Mechanism (EU-ECB-ESM) hadn’t objected, nor had the Washington-based International Monetary Fund which took part in two earlier bailouts.

The stressed that Greece’s international creditors, the EU and the IMF, had not raised objections to the scheme. He said it was in compliance with OECD rules on countering tax avoidance, thanks to the residence requirement.

The term non-doms refers to people who will become Greek residents but claim their primary domicile in another country, which means they won’t be liable for tax on offshore income and capital gains unless the money is brought into Greece.

“One attraction of a non-dom program for a global businessperson is that you don’t have the administrative costs associated with managing trusts and paying taxes in a number of jurisdictions,” Yiangos Charalambous, a tax consultant, told the news magazine.

Greece’s non-doms will have to invest 500,000 euros ($554,725) 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 grandfather clause will protect against changes of policy by a future government which won’t be able to make changes to the scheme.

Many wealthy Greeks, who would pay far higher taxes than non-doms, already hide their money in secret foreign bank accounts and rich Greeks who live in other countries would be wooed under the new program, especially shipowners living in Switzerland, the United Kingdom, or Monaco, the report said.

“We saw shipping people based in Athens pack up and flee abroad during the Greek crisis. Now there is political stability and a tax incentive: two good reasons to return,” said a maritime insurer based in Piraeus port.

Those in the diaspora who visit Greece could take advantage, Philip Stefanides, an adviser to foreigners buying Greek real estate, told FT.

“We already get a lot of inquiries from successful people approaching retirement and wanting to spend time close to their Greek roots. This (program) could be a game changer,” Stefanides said, if only for the wealthy.