Le Figaro this week reported that both Greece and Cyprus have unveiled attractive tax breaks to attract foreign pensioners, as increasing numbers of French pensioners are choosing to to live abroad. The figure, in fact, has doubled to more than a million over the past decade.
Portugal, Italy, Tunisia, Morocco and Malta also promotes such breaks in order to lure west European retirees.
The French paper reminded that Athens has unveiled an annual tax rate of 7% for 15 years for EU pensioners who move their tax residence to the country.
“The logic is very simple. We want retirees to settle here. We have a beautiful country, a very good climate, so why not?” Athena Kalyva, head of tax policy at the Greek finance ministry explained.
She pointed out that it isn’t necessary to acquire real estate in Greece to benefit from the system. It is sufficient simply to reside in the country for 183 days a year and to be a citizen of a country that has signed a bilateral tax treaty with Greece, as France has.
In the case of Cyprus, according to a French-Cypriot tax agreement in far-back 1981, French pensioners are taxed in Cyprus rather than France if they decide to establish a residence on the island republic. The tax system works towards their benefit, Le Figaro states. The first 3,420 euros of a yearly pension are exempt from tax, with the remainder taxed at just 5%.
Finally, the French newspaper pointed out that there is no property or inheritance tax in place in Cyprus.