The Greek government has decided to copy, and attempt to implement, Italy’s model of encouraging ultra-wealthy individuals and large companies to move their tax residency to Greece, according to media reports on Monday.
The final formula for the new tax scheme will be included in a new taxation bill that Greece’s conservative government intends to bring forward for discussion in the country’s Parliament in November.
According to media reports, Athens hopes to introduce a system of a fixed-sum-tax, set approximately at €100,000 per year, regardless of how high the individual’s income might be.
As it is now understood, this could seem very attractive to the extremely wealthy, who would normally have to pay multiple times that fixed amount, if their multi-million euro profits were to be taxed normally.
Additionally, each member of the families of those who would transfer their tax residency to Greece would pay only a fixed sum of €25,000 per year, regardless of how much income these family members may have earned from their businesses abroad.
Of course, this proposed scheme will be enforced with a set of extremely strict criteria, to avoid money laundering.
Similar systems are currently being implemented by a range of European Union member states, including Italy, Portugal, Malta, and Cyprus.
The Greek government has studied all of these examples closely and concluded that the Italian system would be the best fit with Greece’s specific tax situation.
Greek officials also believe that the timing of such a decision is perfect, since scores of ultra-wealthy individuals and large companies which were residents and taxpayers of the UK for years, have now fled the country amid growing fears over Brexit and its unforeseen consequences.
As these individuals and corporations search for safer havens in EU member states, Greece’s new plans might seem attractive.
This would alter the long-standing reality of Greece being seen not simply as an unattractive tax destination for foreigners, but a place where even its own citizens changed their tax residency to avoid the extraordinarily high tax rates which were imposed during the crisis years.
The decision, however, is expected to be resisted by the country’s opposition, since these measures have already proven to be controversial anywhere they have been implemented.
Some even see it as a way of legalizing tax evasion, in which countries compete with each other to attract capital.