Greece has changed the rules for retirees living abroad who want to move their tax residence to the country and take advantage of a 7% tax rate on qualifying foreign income. The most immediate change is the deadline. Retirees will now have until Oct. 31 to apply, rather than March 31, and they will not need to have all of their supporting documents ready when they file. Any missing paperwork can be submitted by Nov. 30. The changes also set clearer deadlines for when applications must be reviewed and when the 7% rate can begin to apply.
More than 1,700 applications have been filed so far and about 1,000 have been approved. Most have come from retirees in Northern and Western Europe, including Britain, Germany, France, the Netherlands and Scandinavian countries. Interest has also been growing among retirees from the United States. The special tax regime can remain in place for up to 15 years.
Who can apply?
The program is open to people who receive a pension from abroad and move their tax residence to Greece. To qualify, an applicant must not have been a Greek tax resident for at least five of the previous six years. The person must also be moving from a country that has an agreement with Greece allowing the two countries’ tax authorities to cooperate on tax matters. Applicants must be able to show that they are entitled to receive a pension from abroad.
In some cases, Greece’s Independent Authority for Public Revenue (AADE), may already have enough information to establish where the applicant was previously a tax resident. If not, the retiree may be asked to provide documents such as a certificate of tax residence, previous tax returns or other official records from the country where he or she previously resided.
When the 7% tax rate takes effect?
Retirees who move their tax residence to Greece by July 2 can apply for the 7% rate for either that tax year or the following one. Those who move their tax residence after July 2 can qualify for the 7% rate only from the following tax year.
Applications must be reviewed within 60 days, and a decision must be issued no later than the final working day of December. The applications are handled by tax service centers known as KEFODE. The Attica office handles people whose address is in the Attica region, as well as on Kea, Kythnos, Andros and Milos. The Thessaloniki office handles applicants living elsewhere in Greece.
How the tax works
For retirees who qualify, foreign income covered by the special tax regime is generally taxed in Greece at a flat rate of 7%. There may be exceptions where a tax treaty or another international agreement provides for an exemption or different tax rules.
The tax is paid once a year, in a single payment, by the last working day of December. Once it has been paid, no further Greek tax is due on the foreign income covered by the 7% rate. The year end payment deadline is crucial. Retirees who do not pay the tax by the last working day of December lose the 7% rate and are instead taxed under Greece’s ordinary rules on their worldwide income.
Income earned in Greece is taxed separately under the country’s ordinary tax rules. Under certain conditions, tax already paid abroad can be deducted from the amount owed in Greece, but not beyond the Greek tax due on that income. The 7% tax cannot be offset against other tax debts or tax credits, and it cannot be paid in installments.
How to apply
Applications and supporting documents can be filed online through Greece’s myAADE tax portal. Applicants using the online service should go to “My Requests,” start a new request and select the option for alternative taxation of people receiving pension income from abroad under Article 5B of Greece’s Income Tax Code.
Applications can also be sent by registered mail or courier to the appropriate KEFODE office in Attica or Thessaloniki. Retirees can also apply in person at the relevant KEFODE office after booking an appointment through myAADE. Help with the application is also available at myPoint offices in Attica, tax service offices and local tax offices.
The new rules apply not only to future applications but also to those that are still pending. They also apply to tax assessment decisions for the 2025 tax year.
With information from TA NEA
