A 50% Tax Break for Working From a European Beach? Yes, Please…

Two years ago this month I was traveling through Greece for 15 days, partly on a work assignment, partly on holiday with my then-girlfriend/now-wife Yuliya. As we drove through the rocky landscape of Crete, the largest Greek isle, we both looked at each other and said, “This would be a great place to live for a while.” 

It’s certainly old news to tell you that Greece is beautiful. That the Aegean Sea is gorgeous. That Greek food and culture and hospitality are off the charts. But I’ll tell you anyway, as though it’s the latest and greatest news, because Greece is just that amazing. And now, it’s potentially even better… 

Greek officials are mulling the idea of introducing a new digital nomad visa. It’s the latest country to do so, and it underscores a trend: Countries all over the world are increasingly looking to woo digital nomads as a new movement takes shape. That movement is one I’ve been writing to you about for nearly a year: the rise of the stay-at-home/work-from-anywhere workforce. 

It’s one of the positive outgrowths of the COVID-19 pandemic, and it’s only getting larger. 

I recently saw a stat from Randstad Sourceright, a global talent recruiter, noting that 80% of “human capital leaders” (which I assume are the hiring and firing pooh-bahs and their HR departments) say that remote work will be part of their future employment models. Nearly two-thirds of them now say that flexible work options—work from home, work from wherever—is a “must-have” for employers who want to recruit top talent. 

And it’s not like that’s a one-off study coming out of left field. Enterprise Technology Research expects the percentage of workers permanently working from home will double in 2021. Meanwhile, a Gartner survey from December showed that 90% of HR leaders now say they will allow employees to work remotely, even in a world where COVID-19 vaccines are available. 

We are at the vanguard of a whole new order. 

And if that new world order allows you to work from wherever…well, there are an increasing number of wherevers that want you. 

Last year, as you likely know, a number of Caribbean islands launched digital nomad visas. Estonia, a beautiful little country tucked into northeastern Europe, offers one as well. Croatia just launched one in January (apparently, an American woman was the first recipient). 

Costa Rican lawmakers a few weeks ago introduced a bill titled “Law to Attract International Workers and Remote Service Providers” in hopes of luring to the gorgeous, tropical corner of Central America a bunch of digital nomads earning at least $3,000 per month. Unlike most digital nomad visas that limit your local life to a single year, Costa Rica’s visa, once approved, will allow for two years. 

And then there’s Greece… 

Now, if you’ve followed my writings over the past seven or eight months, you will likely know that I am generally not a big fan of these digital nomad visas. Personally, I find them a bit pointless, unless one is simply seeking a sabbatical or a year-abroad program. Otherwise, I think it’s far savvier to pick a country where you can obtain a temporary residence permit that then transitions into a long-term residence permit. That way, if you end up loving life in your year abroad, you can turn it into something more permanent, rather than having to leave and start over somewhere else. 

That said, the early indications of what the Greek visa might look like give me reason to cheer this plan. 

None of the details are final, and there is no timeline set forth just yet, but one of the ideas I’ve seen has Greece offering a 50% tax cut to digital nomads. That’s not a bad deal. It means you’d be paying taxes at a 22% rate locally on earnings over €40,000 a year (about $48,000 currently). 

Keep in mind that because you’d be living and working in Greece, you’d be eligible for Uncle Sam’s Foreign Earned Income Exclusion that allows you to write off $108,700 from your 2021 personal taxes. Plus, you’d collect housing credits that can save you hundreds more in U.S. taxes. You’ll still owe self-employment taxes, assuming you’re working for yourself. Nevertheless, the tax exclusion in the U.S. and the hefty tax break in Greece make an Aegean lifestyle seem really compelling to me. (Trust me when I vigorously repeat that Greece really is that beautiful.) 

Better yet, that Greek tax break would be in place for seven years. That’s an important number. 

See, Greece allows you to seek permanent residence and Greek citizenship after seven years of living locally. How convenient that the digital nomad visa/tax break matches up.  

Greek citizenship comes with a Greek passport…which is a European Union passport…which allows free rein to live and work and travel throughout the EU just as easily as you might live and work and travel between Georgia, Kansas, and Oregon.  

Wrap it all together in a pretty bow, and Greece is at work on what might just be the best digital nomad visa on the planet to date. Again, nothing is finalized yet. So, who knows how this visa ultimately takes shape? I’ll keep you updated along the way. 

But maybe start taking some Greek language classes in the meantime—just in case.