What to take into consideration– from tax prep to culture
Americans relocating to Greece are drawn there like bees to honey.
Stunning architecture, black sandy beaches, sunny weather and low cost of living. All reasons to relocate to Greece as an American. In fact, there are so many reasons to move there (or spend a year there with a Digital Nomad Visa) that we don’t know why you haven’t packed your bags yet.
Beauty, climate and lifestyle aside, you ought to consider several Greek tax points, and general recommendations before you go.
Have you saved up the resources to live life the way the swinging centenarians do in Ikaria?
Check below to find out.
Relocate to Greece as an American : Table of Contents
(click the topic of interest if you want to skip ahead)
- Tax Residency
- Taxation of Income
- Tax deductions
- Exception to the Rule: Tax Residency under the SPECIAL EXPATRIATE, or Non-Domiciled Individuals (NDI) Regime
- Social security contributions
- Double taxation
- Tax deadlines
- Visa Requirements
- Greek Language
- Finding Housing
- Cost of Living
- Greek Lifestyle: Culture and Customs
- Employment Opportunities
- Banking and Finance
- High Quality of Life
What To Know About Taxes As An American Relocating to Greece
Tax residency as a Resident
Firstly, you might be considered a tax resident in Greece when you stay there for 183+ days in a year. Once you are considered a tax resident, you have to pay taxes in Greece for your worldwide income.
At the moment, what’s clear is that you are able to reside in Greece and work remotely as an American. Unfortunately, the Greek government hasn’t made clear whether Digital Nomads can benefit from their citizenship’s tax regime yet. There is no specific Digital Nomad visa yet, but legally you can live and work there with another visa.
Once you are a tax resident, you must file an annual tax return in Greece. You’ll pay taxes on all your income, including any income you earn outside of Greece. You will also pay Greek social security contributions, typically around 20% of your income.
Greece has tax treaties with many countries, including the United States, to prevent double taxation. If you are an American relocating to Greece, and you pay taxes on your income in both Greece and the United States, you may be eligible for a tax credit. This cancels out being taxed twice on the same income.
Tax residency as a Business Owner
Are you an American entrepreneur planning to open a company in Greece? If so, you will have to pay Greek tax laws and regulations. In Greece, you can set up a company either as a branch of your existing business, or as a new legal entity. Read more about how to do it.
Once you register your company and it’s operational in Greece, it will be subject to corporate tax on its profits. This tax rate is 24% for 2023, with a rate of 22% for profits up to €100,000. It’s important to know that dividends that go to shareholders are also taxed.
As the company owner, you will pay personal income tax on salary or dividends you receive from the company. The personal income tax rates in Greece are progressive and depend on your income (see below).
It’s important to work with a tax professional or legal advisor to ensure you comply with the tax and legal requirements when relocating to Greece as an American. They can help you navigate the process and set up your business so it is in compliance with Greek regulations.
Taxation of income
Greece has a progressive tax system. It means that the more you earn, the higher the tax rate you’ll have(with a cap). Income tax rates range based on job type. The case of a private employee earning an annual salary is different from a pensioner that is annually receiving a pension, which is different from a sole proprietorship. The tax rate ranges from 9% to 44%, depending on their income level.
In order to make it more clear, the below table shows the scale base of the taxation in relation to the annual income:
|ANNUAL INCOME IN EUROS||TAXATION RATE|
When it comes to the establishment of a company, there is a flat tax rate applicable of 22% on the net income a company receives. This follows the deductions of expenses generated due to the business activity. Additionally, there are taxes on dividends that amount to 5%, interest income, and rental income a physical person might gain. It fluctuates from 15% up to 45%, calculated on a scale basis.
- Regardless of whether an American relocating to Greece prefers to be considered a tax resident, there is a specific tax regime that they may have to follow. It is the special expatriate regime. Employees, members of the BoD/legal representatives of companies, sole proprietors, investors and retirees could be taxed under this regime. If you are eligible, you may pay up to 50% of your income depending on your income level.
It’s not all bad news. There are several tax deductions available to you as an American relocating to Greece. In relation to your personal income, your tax deductions might include:
- deductions for medical expenses
- charitable donations
- tuition fees
Additionally, expenses related to business activity can be applied to your corporate taxes. For example, within the company’s activity there are operational expenses you could generate like utility bills, rentals, leasings, and the cost of equipment.
All these expenses are deductible from the turnover your company has at the end of the financial year. Therefore, before the implementation of corporate tax, the aforementioned amounts must be deducted in order for the company to be taxed on the net income it generates.
Exception to the Rule: Tax Residency under the SPECIAL EXPATRIATE, or Non-Domiciled Individuals (NDI) Regime
Greece has a special tax regime for high-earning qualifying expatriates, designed to attract high-skilled workers and investors to the country. This is the Non-Domiciled Individuals (NDI) Regime.
Under the NDI regime, you can choose to pay a flat tax of €100,000 per year on your foreign-sourced income and capital gains, instead of the regular Greek income tax. This option is available for a period of 15 years.
Apart from this flat tax rate, you must first qualify.
To qualify requires:
+ A minimum investment of €500,000 in Greece, either in real estate or in shares of a Greek company.
+ You must make this investment within three years of becoming a tax resident in Greece.
+ Other requirements and conditions, such as not having been a tax resident in Greece for at least seven of the previous eight years.
In addition to the flat tax rate on foreign-sourced income, individuals in the NDI regime are exempt from Greek tax on any income earned from employment outside of Greece. However, income earned in Greece is subject to the standard Greek income tax rates.
Wondering whether the NDI regime would charge you less than the American tax system? It depends on your income level and the amount of foreign-source income and capital gains you have.
If your income is less than €100,000 per year, the NDI regime may actually have lower tax liability compared to the American tax system. However, if your income is higher, it’s possible that the American tax system could be more advantageous. It’s important to consult with a tax professional to determine the best tax strategy based on your situation.
Social security contributions
In Greece, employees and employers are required to pay social security contributions. They go to the National Insurance Organization, which uses the Greek acronym EFKA. The employee’s contribution is typically 13.87% of their gross salary. The employer’s contribution is 22.29% of the employee’s gross salary.
Although it is good to be aware of the social insurance contribution scheme applicable, Digital Nomads working for a company outside of Greece do not have to register with the National Insurance Organization for the time being. As long as you have private insurance, you meet the minimum requirements according to the law.
However, as an American expat living and working in Greece, you may be required to make social security contributions in Greece. Greek social security contributions are mandatory for all individuals who are employed or self-employed in Greece, including foreign workers.
The amount of social security contributions you will need to pay depends on your income level and the type of work you do. For employees, the employer typically withholds the required social security contributions from your salary and pays them to the Greek government on your behalf. The employee’s contribution is typically around 16% of their salary, while the employer’s contribution is around 20% of the employee’s salary.
For self-employed individuals, the social security contribution rate is typically higher, ranging from 25% to 28% of their net income, depending on their profession and income level.
It’s important to note that as an American, you may be eligible for Social Security benefits from the United States, which can help offset the cost of Greek social security contributions. The United States has a Social Security Totalization Agreement with Greece to help avoid double social security taxation and provide protection for individuals who work in both countries.
Double taxation for Americans Relocating to Greece
If you are a tax resident in Greece and have income from another country, you may be able to benefit from a double taxation treaty.
A double taxation treaty is a mutual agreement signed between two countries to avoid having both taxed their citizens/residents. Greece has tax treaties with many different countries to prevent double taxation, so it is important to check if there is a tax treaty in place.
The United States and Greece have a tax treaty that prevents double taxation of income on individuals and businesses. The treaty is commonly referred to as the U.S.-Greece Income Tax Treaty.
Under the treaty, individuals and businesses that are resident in one country but earn income in the other country are generally only subject to tax on that income in their country of residence.
The treaty covers a range of types of income, including income from employment, business profits, dividends, interest, and royalties. It also includes provisions to prevent tax evasion and for the cooperation between the tax authorities of the two countries.
For individuals, the treaty includes provisions to address potential double taxation of Social Security benefits, pensions, and other types of income. The treaty also provides for certain deductions and credits to be allowed in both countries to help reduce the overall tax burden.
All European countries are also subject to a common policy in order to avoid double taxation. In case a double treaty is implemented, the country of citizenship cannot tax the personal income gained that has already been taxed from another country. In order to avoid any complications on the implementation of such treaties, each applicant has the duty to inform the relevant tax authorities, in order to be exempt from further taxation, and provide evidence that they have already paid their taxes.
In Greece, the tax year runs from January 1st to December 31st. You can file income tax returns electronically yourself. Of, if you prefer, an authorized accountant can do it for you by June 30th of the following year. You can also choose to pay the tax in installments that could be different each year.
In case someone won’t be able to fill in the annual income return by the end of the deadline, there are applicable fines that amount from EUR 100 up to EUR 500. Furthermore, if someone misses the deadline of the final date of the installment, an interest rate of 0.73% is applicable to each installment.
If you’ve read this far, you might be ready to take actionable steps toward living in Greece. While the process may seem overwhelming, remember that there is no need for you to do it alone. In fact, it’s advisable to consult a tax professional for personalized advice on your specific tax situation in Greece.
Visa Requirements for Americans Relocating to Greece
As an American citizen, you are allowed to enter Greece for up to 90 days without a visa. This visit is allowed for tourism or business purposes. However, if you plan to stay in Greece for longer than 90 days, you will need to apply for a long-term visa or a residence permit.
To get a long-term visa, you can apply at the Greek embassy or consulate in the United States before you travel to Greece. There are several types of long-term visas available, depending on the purpose of your stay, such as study, work, or family reunification.
For example, if you plan to work in Greece, you will need to apply for a work visa, which requires a job offer from a Greek employer and a work permit issued by the Greek Ministry of Labor. More on what you need in order to study in Greece.
To obtain a residence permit, you will need to apply at a Greek immigration office once you arrive in Greece. The type of residence permit you apply for will depend on the purpose of your stay and whether you are a European Union citizen or a non-EU citizen.
For example, if you are a non-EU citizen and plan to work in Greece, you will need to apply for a work permit and a residence permit for employment purposes. If you are an EU citizen and plan to live in Greece, you will need to apply for a registration certificate to confirm your right to reside in Greece.
Overall, the visa and residence permit requirements for Americans moving to Greece depend on the purpose of your stay and your citizenship. Consult with our multilingual immigration lawyers to determine the specific requirements for your situation.
The Language- It all sounds like Greek to me…
According to a survey conducted by the European Commission in 2020, about 51% of the Greek population speaks English to some degree. At first glance, this might seem pretty good to most English speakers. However, the level of English proficiency depends greatly on the age and education level of the individual.
Younger generations and those with higher education are more likely to speak English fluently. Older generations and those with less formal education may have limited English skills.
In terms of situations where Americans may need to know Greek in Greece, it largely depends on the purpose and length of your stay in the country. For short-term visits or tourist activities, you can get by with basic English with a few Greek phrases to show you care and understand.
However, for long-term residence or if you plan to conduct business in Greece, it’s important to study and practice the Greek language. Knowing Greek is especially helpful if you need to interact with locals or navigate bureaucratic processes, as many official documents and government forms are in Greek.
Of course, the more Greek you know, the easier it will be to build relationships and to understand Greece’s rich culture.
Housing in Greece- Finding a Place to Lay Your Weary Head
How to choose when each is more beautiful than the last? You are sure to love living in whatever area you choose as an American relocating to Greece. But if you prefer to live close to other Americans, you may want to start seeking housing in one of the following locations.
Athens is the capital city of Greece and the largest urban area in the country. It offers a vibrant cultural scene, a diverse range of neighborhoods, and easy access to transportation hubs. Many expats enjoy Athens for its history, culture, and vibrant nightlife.
Thessaloniki is the second-largest city in Greece and is popular for its lively atmosphere, student population, and rich cultural heritage. It’s located in the north of the country, close to popular destinations like Halkidiki and Mount Olympus.
Crete is the largest of the Greek islands and is known for its stunning beaches, picturesque villages, and historic sites. Many expats are drawn to the laid-back lifestyle and warm climate of Crete, as well as the island’s unique cuisine and culture.
The Peloponnese is a region in southern Greece that is home to historic sites like the ancient city of Mycenae and the medieval fortress town of Monemvasia. It’s also known for its rugged landscapes, sandy beaches, and traditional villages. Many expats are attracted to the quieter, more rural lifestyle of the Peloponnese, as well as its stunning natural beauty.
The Cyclades Islands
The Cyclades are a group of islands in the Aegean Sea that are known for their whitewashed villages, blue-domed churches, and crystal-clear waters. Islands like Mykonos, Santorini, and Paros are popular with expats due to their picturesque landscapes, vibrant nightlife, and international communities.
Finding a place to live is an important part of the moving process. Research the different neighborhoods in the cities you’re considering, and consider factors such as proximity to public transportation, safety, and amenities. You may also want to consider working with a local real estate professional to help you find the perfect place.
Healthcare in Greece
Greece has a public healthcare system, but you may want to consider purchasing private health insurance to ensure that you have access to the best medical care available.
Pluses of the Healthcare System for Americans relocating to Greece:
- Affordable healthcare: The cost of healthcare in Greece is generally much lower than in the United States, and Americans generally consider this to be a major advantage.
- Quality of care: Greek healthcare professionals are generally well-trained and provide high-quality care, particularly in areas such as primary care and preventive medicine.
- Availability of healthcare: There are many healthcare facilities in Greece, and in most cases, you can access care relatively easily.
Negatives of the healthcare system for Americans relocating to Greece:
- Language barrier: For Americans who do not speak Greek fluently, navigating the healthcare system can be challenging. While many healthcare professionals do speak English, this is not always the case.
- Long wait times: In some cases, American expats complain of long wait times for appointments or procedures, especially in public hospitals.
- Lack of specialized care: While the quality of primary care is generally good, some expats find it difficult to access specialized care in certain areas.
Cost of living in Greece
Greece has a relatively low cost of living compared to other European countries. Notwithstanding, it’s still a good idea to understand the cost of living in the specific town or city that you’re considering.
Consider factors such as rent, food, transportation, and entertainment all differ from city to town to island.
Culture and customs for Americans in Greece
If you are already thinking about relocating to Greece as an American, chances are that you already know and appreciate Greek culture. However, if you are just starting to think about visiting Greece, the country has a lot of wholly unique culture.
It’s the birthplace of democracy where the ancients created the foundations of Western philosophy today. In the world of the arts, immerse yourself in iconic structures such as the Parthenon. And inside? Hyper-realistic statues celebrating the human body, Greek god mythology, and the Odyssey.
Today, we celebrate Greece for its delicious Mediterranean cuisine and wine, its relaxed and laid-back lifestyle, and lovely picture-perfect settings. Generally, people in Greece spend time outside to enjoy the Mediterranean climate, with its warm summers and mild winters.
Employment opportunities in Greece
If you’re planning to work in Greece, research the job market and consider whether your skills and experience are in demand. You may also want to consider networking with other expats. Additionally, try joining local professional associations to help you find job opportunities even before the move.
Banking and finances in Greece
Before you move to Greece, research its banking system. Consider opening a bank account to help you manage your finances. You will probably want to transfer money to a Greek bank account at some point. This will make it easier to pay bills and make purchases in your day-to-day life.
High Quality of Life in Greece
What one person considers a high quality of life may differ from another person’s perspective. Despite this fact, most Americans perceive the quality of life in Greece to be high, despite its economic difficulties.
Greece offers a high quality of life. It has a strong sense of community, excellent healthcare, and a relatively low crime rate. Greeks are known for their hospitality and friendliness, making it easy for Americans to feel right at home.
Preparing to go to Greece?
If you are ready to take steps toward relocating to Greece as an American, you aren’t alone. Reach out to us through the form below. Our multilingual legal eagles will reach out to guide you with all the information and paperwork. That way, you’ll have a lot more time to practice Greek on your language app before you go!