Consistent with our commitment to keep you updated on the most significant tax developments, we outline below the most significant changes introduced with the new voted Tax Bill.
|Income scale (EUR)||Tax rate (%)|
|0 - 10 000||9%|
|10 001 - 20 000||22%|
|20 001 - 30 000||28%|
|30 001 - 40 000||36%|
|Taxpayer's dependents||Tax credit (EUR)|
|For each additional dependent child||+220|
The amount of tax credit is reduced by EUR 20 (instead of EUR 10 currently in force) for every additional EUR 1 000 of income exceeding the threshold of EUR 12 000 (instead of the threshold of EUR 20 000, which is currently in force). This provision does not apply to taxpayers with 5 or more dependent children.
Capital gains tax arising from the sale of immovable property is being postponed until 31 December 2022. This provision is in force upon publication of this law.
As of tax year 2019 onwards, private cars of tax payers having at least 4 dependent children are exempt from luxury tax.
The benefit arising from the waiver of debt in the context of a mutual agreement or a judicial settlement is taxed as business income and not as donation. Nevertheless, the exemption from income tax and donation tax available for the benefit arising from the waiver of debt (in full or partially) towards credit and financial institutions or companies servicing NPLs in the context of an out-of-court settlement or by way of executing a judicial decision according to the provisions of article 62 of L.4389/2016, still applies.
It is clarified that the beneficial regime of the Directive 2003/49/EK for the exemption of interest and royalties from tax withholding applies to payments between domestic affiliated legal entities as well.
The dividends tax rate is reduced from 10% to 5% for dividends distributed as of 1 January 2020 onwards.
The tax authorities shall be entitled to request from administrators of sharing economy digital platforms any information or evidence related to taxpayers transacting through such platforms as sellers. In case of non-compliance to such requests, it is stipulated that the tax authorities may request from the relevant Internet Service Providers (ISP) to restrict access to the respective platforms, as well as impose penalties to ISP, to the platforms’ administrators, to the taxpayer and any other person or entity to which such requests are addressed.
Independent Authority for Public Relations (IAPR)
The provisions relating to the joint liability of legal representatives (and of other explicitly defined as jointly liable persons e.g. Directors, etc.) for any outstanding tax and social security liabilities and payments of the legal entities that they represent are amended. More specifically, a set of targeted conditions for determining such liability is introduced with the aim for the latter to be further rationalized. In addition, the relevant provisions also expand the range of taxes covered while they determine the period to which such liability refers.
The favorable arrangements (providing for exemption from income and donation taxation) applicable for the writing-off of bad debts of individuals and legal entities within the context of an out-of-court settlement or in accordance with a court decision are extended until 31 December 2020.
Amendments are being introduced to the scheme for the settlement of tax debts assessed from tax and customs authorities as of 1 January 2020 in an effort to improve the responsiveness of individuals and companies in settling their tax liabilities (e.g. maximum number of installments increases from 24 to 48, interest calculation changes, a possibility is introduced to include again in the settlement scheme old tax debts of a debtor for the second and last time, rewards to consistent tax debtors with exemption from the last installment are granted, etc.).
The freezing of 50% of the taxpayers’ deposits, bank accounts and safe deposit boxes in the context of restrictive measures imposed against them by the Greek State, is limited to twice the outstanding amount due to the State.
The SRET exemption is broadened to include new investment vehicles (explicitly named) and other entities regulated according to the domestic and European legal framework currently in force. This is also extended to companies the shares of which are listed in a regulated market or a Multilateral Trading Facility. Such an extension of the SRET exemption aims to prevent SRET provisions to become an obstacle to genuine investments efforts in the Greek real estate market.
Real Estate Investment Companies (REICs)
Portfolio Investment Companies (AEAX)
The tax rates applicable to UCITS, REICs and Portfolio investment Companies (AEAX) remain the same. The minimum tax thresholds however, which were introduced by virtue of Law 4389/2016, are now abolished. Such thresholds often resulted in a disproportionate tax burden on the above collective investment vehicles, as compared to the more favorable tax rates applicable on other Greek collective investment organizations and other similar European vehicles.
The annual contribution of 0.6% of Law 128/1975 which applies on factoring and leasing contracts is abolished. The said abolishment applies as from the 1st day of the month following the publication of the new tax law.
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