Greece to Cut Taxes and Offer Incentives for Large Investments

The Greek government plans to offer tax relief to households, cut the business tax and offer incentives to lure wealthy individuals to move their tax residence to the country as part of draft legislation which opened for public consultation on Thursday.

The bill provides extensive measures to reduce the burden on households, including the introduction of a basic tax rate of 9 percent for workers, contractors and pensioners – instead of the current 22 percent – and other measures, including a higher tax exemption per child.

It also envisages a reduction in business tax from 28 to 24 percent for 2019, and incentives to link large investments with a reduction in taxable foreign income.

The so-called non-dom program will offer qualified wealthy investors who opt to shift their tax residence to the country a flat tax of 100,000 euros ($110,710) on global incomes earned outside Greece annually.

Dividends tax will also be reduced from 10 to 5 percent, and company bonds in official markets will be relieved from income tax and the solidarity fee.

In the sector of construction, it moves ahead to suspend VAT payments for all licenses issued as of January 1, 2006 and it also introduces a 40 percent tax reduction in improvements to make buildings more energy-efficient.

Additionally, it also introduces an attempt to crack down on tax evasion, by obliging transactions above 300 euros to be carried out and thus registered by electronic means (from the current 500 euros per transaction).

“In other words, the taxation bill sets the foundations for Greece’s economic renaissance,” the Finance Ministry said in a statement presenting it on Thursday.

The draft bill, titled “Tax reform with a development prospect for Greece’s future,” is open for comments by specialists and the public alike, until November 15.