Digital Nomads Visa in Greece: Tax concerns

The digital nomadic visa, introduced under Article 11 of Law 4825/2021, provides a viable transition option for digital nomads, giving them the opportunity to reside and work at a distance in Greece. However, the new legislation does not include tax provisions, so its implementation raises questions as to whether there are ultimately tax risks in this case.

 

Immigration

According to the new provisions of the Greek Immigration Code, third-country nationals (i.e. outside the EU / EEA) who are self-employed or dependent workers, who work remotely using technologies and communications with employers or clients outside Greece, i.e. nomadic children, you can not apply for a visa for Greece, valid for up to 12 months. Applicants may be accompanied by family members.

 

At the same time, it is particularly important to mention that the digital nomadic visa does not provide the right to dependent work or independent business activities in Greece. In practice, this means that digital nomadic visa holders can only provide services to employers and / or clients established outside Greece.

 

Visa

 

The digital nomadic visa is issued by the Greek consular authority of the applicant’s place of origin or main place of residence, under an expedited procedure. In particular, the competent consular authority is obliged to respond within 10 days of the relevant request and, provided that complete documentation has been submitted, to complete the visa application process at a meeting.

 

The applicant must document that he will provide remote work to clients or employers outside Greece. In addition, the applicant is required to provide evidence that he has sufficient resources as a stable income to cover his living expenses during his stay in Greece. The amount sufficient is set at € 3,500 per month. If the aforementioned adequate resources come from dependent employment, service provision or contracting work, the above minimum amount relates to net income after payment of the required taxes in the country where the employment or services are provided. The above minimum amount is increased by 20% for the spouse or roommate and by 15% for each child.

 

If the holder of the digital nomadic visa estimates that they will remain in Greece after the expiration of its validity period, they can apply for a corresponding residence permit, if the conditions for the issuance of the digital legal visa continue to apply. The respective residence permit is issued by the competent authority of the Greek Ministry of Immigration and can be renewed for a period of two years, for each renewal. The main applicant’s family members can also issue a corresponding residence permit. However, in both cases, the respective residence permits do not provide the right to dependent work or independent business activity in Greece.

 

Taxation & digital nomads in Greece

According to the Income Tax Code (Law 4172/2013) (KFE), taxpayers who have their tax residence in Greece, are taxed in Greece for their taxation that arises both in Greece and abroad (i.e. global income) acquired within the tax year.

 

A tax resident of Greece is considered a natural person if he maintains his permanent or main residence in Greece or his usual residence or the center of his vital interests, i.e. his personal and financial ties. According to the current legal provisions, taking into account that the original digital legal visa can be issued for a period of one year, with the possibility of extension, each time the digital legal visa is subject to tax in Greece for import. arising abroad, if their stay in Greece exceeds the limits set by the ITC.

 

The Greek tax authorities have not provided in the present clarifications on whether the respective legal provisions will be amended in order to replace the holders of the digital nomadic visa from being considered tax residents of Greece.

 

Risk of permanent installation

According to the ITC, a permanent establishment is the specific place of business through which the entity carries out all or part of its business activities. Furthermore, if a person acts on behalf of the entity and is authorized to enter into agreements on its behalf, then the entity is deemed to have its permanent establishment in Greece in respect of the business activities undertaken by such person on its behalf, with the exception of those activities that I define as exceptions to the ITC.

 

Depending on the circumstances, there is a significant risk that a digital prefecture will “trigger” a permanent establishment in Greece for the company in which it works or which it represents.

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Written by Athanasia Grammoustianou