The Greek €100,000 flat tax has attracted considerable interest among internationally mobile individuals and families. However, when comparing Greece with Malta, it is important to separate three different questions:
- Where does the individual have the legal right to live?
- Where is the individual tax resident?
- Which tax regime applies once tax residence has been established?
A residence permit does not automatically make someone tax resident, and tax residence does not necessarily require participation in a residence-by-investment programme.
The Greek €100,000 flat tax regime
Under Article 5A of the Greek Income Tax Code, a qualifying individual who transfers their tax residence to Greece may pay a fixed annual tax of €100,000 on all foreign-sourced income, regardless of the amount of that income.
The regime may apply for up to 15 tax years. It may also be extended to qualifying family members for an additional €20,000 per person per year.
Greek-sourced income remains taxable separately under the ordinary Greek tax rules.
To qualify, an individual must generally:
- not have been tax resident in Greece for seven of the previous eight years;
- transfer their tax residence to Greece; and
- make a qualifying investment of at least €500,000 in Greece.
The investment must generally be completed within three years from the date of application.
What investment is required in Greece?
The €500,000 may be invested in qualifying Greek assets, including:
- real estate situated in Greece;
- a Greek business;
- shares or interests in Greek companies or legal entities;
- Greek government or corporate securities; or
- qualifying investment or alternative investment fund structures.
The investment is not a government donation or application fee. It is a genuine investment that must be documented and maintained in accordance with the applicable rules.
For some investors, real estate may be the most straightforward option. Others may prefer an investment in a Greek company, securities or a professionally managed investment structure.
The investment decision should not be made solely for tax purposes. The commercial quality of the investment, its liquidity, projected return, risk, succession implications and exit strategy should all be carefully considered.
Combining Greek tax residence with the Golden Visa
For a non-EU national, the Greek Golden Visa may provide the legal right to reside in Greece, while Article 5A provides the special tax treatment.
The principal real estate thresholds under the Greek Golden Visa are currently:
- €800,000 in high-demand areas, including Attica, Thessaloniki, Mykonos, Santorini and certain larger islands;
- €400,000 in other areas of Greece; and
- €250,000 for certain qualifying property conversions and the restoration of eligible historic buildings.
A carefully selected property may potentially satisfy both the Golden Visa requirement and the €500,000 Article 5A investment requirement.
For example, an €800,000 qualifying property may be relevant to both applications. However, a €400,000 or €250,000 Golden Visa property would not, by itself, reach the €500,000 tax investment threshold.
The two regimes must therefore be reviewed separately.
A Greek Golden Visa provides residence rights but does not automatically make the holder tax resident in Greece. To benefit from the €100,000 regime, the individual must formally transfer their tax residence to Greece and be approved under Article 5A.
Residence in Malta through MPRP
Malta offers a different structure.
For non-EU, non-EEA and non-Swiss nationals, the Malta Permanent Residence Programme, or MPRP, can provide the right to reside, settle and stay indefinitely in Malta.
The current principal requirements include:
- a government administration fee – min. €60,000;
- a government contribution of €37,000;
- a charitable donation of €2,000;
- evidence of the required financial resources;
- health insurance; and
- qualifying residential accommodation.
The applicant may either purchase residential property for at least €375,000 or rent property for at least €14,000 per year.
This represents an important difference from the Greek structure. An MPRP applicant does not have to invest €500,000 in property, businesses or securities. The applicant may rent a home rather than purchase one.
However, MPRP is a permanent residence programme, not a tax programme. Obtaining MPRP status does not automatically make the individual tax resident in Malta.
The ordinary Maltese non-dom tax rules become relevant when the individual relocates to Malta and establishes tax residence,.
Ordinary Malta tax residence for non-doms
Malta does not require a €100,000 annual lump-sum payment or a qualifying €500,000 investment simply to access its ordinary non-dom remittance basis.
An individual who is resident but not domiciled in Malta is generally taxable on:
- income arising in Malta; and
- foreign income received or remitted to Malta.
Foreign income that is not remitted to Malta is outside the Maltese tax charge.
Foreign capital gains are not taxable in Malta, even when the proceeds are remitted to Malta, provided they are capital rather than income.
A minimum annual tax of €5,000 may apply in certain circumstances.
Unlike the Greek system, Malta’s ordinary non-dom tax regime does not impose one fixed tax covering unlimited foreign income. The tax outcome depends on the nature, source and amount of income remitted to Malta.
GRP and TRP: Malta special tax programmes
Malta also offers special tax programmes for individuals who prefer the certainty of a defined tax framework.
The Global Residence Programme, or GRP, is available to qualifying non-EU, non-EEA and non-Swiss nationals.
The Residence Programme, or TRP, is available to qualifying EU and EEA nationals and Swiss nationals.
Under GRP and TRP:
- qualifying foreign-source income remitted to Malta is taxed at 15%;
- a minimum annual tax of €15,000 applies;
- Malta-source income is taxed separately at 35%;
- foreign-source income retained outside Malta and not remitted to Malta remains outside the Maltese tax charge; and
- foreign capital gains are not taxable in Malta, even where the proceeds are remitted to Malta, provided that the amounts are capital gains rather than income.
Both GRP and TRP require qualifying residential accommodation, but the property may be rented rather than purchased. They do not require a Greek-style €500,000 investment in property, businesses or financial instruments.
EU and EEA nationals and Swiss nationals may also relocate to Malta under the free movement rules without using any migration programme.
Which country offers the better solution?
There is no universally better regime.
It all depends on the objectives, circumstances and preferences of each family. A decision about residence, tax residence or citizenship can shape the future of a family for many years ahead and, in some cases, may be difficult and costly to reverse.
Tax is important, of course, but it is only one part of the picture.
Where does the family actually want to live? Where would they like their children to study? What kind of lifestyle do they want? How important are healthcare, education, safety, business opportunities, international mobility, language, culture, climate and proximity to other family members?
The Greek €100,000 flat tax may be very attractive for someone with substantial foreign income who values the certainty of a fixed annual tax and is comfortable making and maintaining a qualifying €500,000 investment.
Malta may be more suitable for someone who prefers a remittance-based tax system, does not want to commit €500,000 to a prescribed investment, or values the flexibility of renting rather than purchasing property. Depending on nationality and individual circumstances, Malta offers several different residence and tax routes, including MPRP and the ordinary non-dom remittance basis, as well as GRP, TRP with their special tax regime.
Our role is not simply to present a programme or promote one jurisdiction over another.
It is to understand what the family is trying to achieve, look at the full picture and help them identify the solution that genuinely works for them.
The best programme is the one that serves the long-term interests of the client and their family, financially, practically and personally, and supports the life they want to build in the years ahead.
Get in touch with one of our advisors who can assist with your enquiry – Alexandra Kenna – akenna@valtd.com.
This article is intended for general information and does not constitute individual tax, legal or investment advice.
