politics

Greece Is Slashing Income Taxes to Lure Remote Workers From Abroad

Aris Messinis | AFP | Getty Images
  • The new legislation is expected to be voted through in the next three weeks and will come into force on January 1.
  • Greece experienced one of the most acute "brain drains" in Europe, as workers moved abroad in search of jobs following the global financial crisis.
  • The latest tax measures are part of wider efforts to make the Greek economy more attractive to foreign investors.

LONDON — Greece has introduced new tax incentives in an effort to attract those working from home as it looks to rebuild its battered economy.

Anyone moving to Greece in 2021 will not have to pay income tax on half of their salary for the next seven years, whether salaried or self-employed. The only catch is that it won't apply to people who have been a tax resident in Greece for seven out of the past eight years.

"We are targeting companies that want to open offices in Greece due to Brexit, Greeks abroad who want to return to Greece, digital migrants or tech companies; anybody or any company that wants to open (an) office in Greece," Alex Patelis, economic advisor to the Greek prime minister, told CNBC on Thursday.

The new legislation is expected to be voted through in the next three weeks and will come into force on January 1.

Greece experienced one of the most acute "brain drains" in Europe, as workers moved abroad in search of jobs following the global financial crisis. The country was hit hard, with bouts of social unrest, three bailout programs and it now has the highest government-debt pile in the euro area.

The Greek economy had been picking up over the last two years, but the coronavirus pandemic delivered it a fresh blow. Gross domestic product is set to contract by 9% this year, according to forecasts by the European Commission. The unemployment rate is also expected to reach 18% in 2020 – the highest among the 19-member euro zone.

The latest tax measures are part of wider efforts to make the Greek economy more attractive to foreign investors.

Last year, the Greek government announced a flat tax rate of 100,000 euros ($118,112) annually on income for those who live in Greece for at least six months of the year, and make an investment of 500,000 euros or more within three years.

Meanwhile earlier this year, Athens also introduced a flat income tax rate of 7% for foreign pensioners who transfer their tax residence to Greece.

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