Digital Nomads and Tax Incentives in Greece
- Tax Experts
- Jun 6
- 3 min read
September 26, 2024
The rise of remote work has become a defining feature of the modern workforce, accelerated by technological advancements and shifting societal expectations. Remote work is no longer a niche practice; it’s a global movement. As professionals seek better work-life balance and location independence, many are turning to countries like Greece, which has embraced digital nomads through a dedicated visa program and favorable tax incentives.
Greece’s Digital Nomad Visa — introduced under Law 4825/2021 (Government Gazette A’ 157/4.9.2021) — offers remote workers the opportunity to live and work in one of Europe’s most beautiful countries. But as the number of digital nomads in Greece continues to grow, many have questions about the tax incentives available for those working remotely in Greece, particularly under Article 5C of the Greek Income Tax Code (Law 4172/2013).
Understanding the Tax Benefits of Article 5C
Article 5C provides a significant tax incentive for foreign nationals who move to Greece for work. If you qualify for this tax regime, 50% of your Greek-source income derived from employment or business activity is exempt from taxation. The remaining 50% of your income is taxed according to Greece’s general income tax provisions. This tax incentive is available for up to 7 years.
The application process for Article 5C involves fulfilling certain requirements, making it a valuable scheme for those who wish to live and work in Greece, including digital nomads.
Eligibility for the Article 5C Tax Regime
To qualify for the tax incentives under Article 5C, you must meet the following criteria:
Non-Greek Tax Residency: You must have been a non-tax resident of Greece for at least five of the last six years before becoming a tax resident in Greece.
Tax Residency Transfer: You must transfer your tax residency from an EU, EEA member state, or a country with which Greece has signed a tax administrative cooperation agreement.
Minimum Two-Year Commitment: You must file a declaration confirming your intent to stay in Greece for at least two years.
Employment or Freelance Status: You must be employed by a Greek company or a permanent establishment of a foreign company in Greece, or you must be registered as a freelancer with local authorities, regardless of the nationality of your clients.
A Closer Look at the Employment Requirements for Digital Nomads
While the Digital Nomad Visa allows location-independent work, the Article 5C tax regime includes a notable limitation: your employer must be a Greek entity or a permanent establishment in Greece, or you must be registered as a freelancer in Greece.
This can seem at odds with the digital nomad lifestyle, where the freedom to work from anywhere is a core value. However, many companies are increasingly adapting to this shift in the labor market. Some digital nomads are turning to Employer of Record (EOR) services, which allow them to work for international companies while staying compliant with local employment laws in Greece.
The Flexibility of the 5C Tax Regime
While the Article 5C tax scheme was initially designed with traditional employment models in mind, it remains flexible enough to accommodate digital nomads. It allows foreign nationals to become Greek tax residents without losing their independence in terms of where their clients are based or how they work.
Furthermore, this favorable tax scheme is not limited to digital nomads alone; it applies to any foreign individual who fulfills the conditions of transferring their tax residency to Greece, offering a potential pathway to tax savings for international workers.
What’s Next for Digital Nomads in Greece?
With the global trend towards remote work continuing to grow, Greece is positioning itself as a top destination for digital nomads. Its mix of favorable tax incentives, beautiful landscapes, and vibrant culture makes it an attractive place for location-independent professionals.
The evolving tax incentives and employment models in Greece create opportunities for remote workers to thrive in an increasingly flexible global job market.
