November 7, 2019 / 3:12 PM / 14 days ago

UPDATE 1-Greece to offer tax incentives in bid to lure rich foreigners

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ATHENS, Nov 7 (Reuters) - Greece will offer financial incentives to encourage wealthy individuals to move their tax residence to the country, part of a package of tax relief measures to be announced later on Thursday, a senior government official said.

Greece’s conservative government is keen to attract investments to boost the recovering economy’s growth prospects. The country emerged from international bailouts in 2018.

Tax relief included in the draft legislation, which will be submitted for public consultation later on Thursday, will include a cut in the corporate tax rate to 24% from 28% and lowering the tax rate on dividends to 5% from 10%.

It will also exempt EU holders of Greek corporate bonds from any tax on earned interest, and tax relief for mutual funds and real estate trusts, doing away with tax increases introduced by a previous government during a debilitating debt crisis.

The so-called “non-dom” programme 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.

“The tax incentive will run for a duration of up to 15 years and will include the benefit of no inheritance tax for assets outside Greece,” a senior government official told Reuters.

One of the requirements to qualify will be residing in Greece for at least 183 days per year and making an investment of at least 500,000 euros within three years.

“The investment can be in real estate, stocks or bonds. If the investment reaches 1.5 million euros then the flat tax is cut by half,” the official said.

Investments of 3 million euros will reduce the flat tax to just 25,000 euros. There will also be a grandfathering clause protecting investors from policy changes by future governments.

“Once you’re in the programme, you’re in. A future government cannot get you out,” the official said.

The government’s rationale is that the tax incentive can entice deep-pocketed investors, including shipping magnates, to take up the offer and move to Greece, boosting investments.

Taxes on mutual fund assets jumped as much as seven-fold in 2016 as Greece scrambled to raise state revenues.

Real estate funds, a fast-growing source of investment in recent years, were also hit during the crisis years because Athens doubled a separate tax on landlords, in turn hurting property values. ($1 = 0.9 euros) (Reporting by George Georgiopoulos and Renee Maltezou, Editing by Angus MacSwan)

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