Greece Income Tax: New Amendments to the Greek Tax Framework

The Greek Parliament has passed a draft law (L. 4799/2021) amending the country’s tax law. With this, the legislator is significantly reducing the corporate tax rate and income tax prepayments and, from 2022, the solidarity contribution for certain types of income.

The Tax Changes in Law L. 4799/2021 Include:

1. Reduction of the Corporate Income Tax Rate
From the tax year 2021 onwards, the income tax rate for legal entities and individuals conducting business activity is reduced from 24% to 22%.

2. Decrease in Income Tax Prepayments
The income tax down payment for freelancers is reduced from 100% to 55%. The prepayment assessment is based on the income tax returns of the tax years 2020 onwards.

From the tax year 2021 onwards, income tax down payments for legal persons and legal entities are reduced from 100% to 80%. In addition, the down payment has been set exceptionally to 70% for 2020 income tax returns.

For Greek banking institutions and branches of foreign banks operating in Greece, income tax prepayment remains at 100% for the tax years 2020 onwards.

Would you like to know more about the effects of the tax changes on your company? Contact us.

Dimitrios Leventakis, Managing Director, ECOVIS HELLAS L.T.D., Athens, Greece

3. Exemption from the Special Solidarity Contribution for Special Types of Income for Tax Years 2021 and 2022
For the tax year 2021, all individual income including employment income earned by private sector employees, business income, income from capital (dividends, interest, royalties and rental income), and capital gains is exempt from the special solidarity contribution. The exemption does not apply to employment income earned by public sector employees and pensioners.

For the tax year 2022, employment income earned by private sector employees is exempt from the special solidarity contribution.

4. Five-Year Allocation Benefit Method
A 5-year allocation method is provided for the benefit arising from the offset of the claw back of pharmaceutical expenditure with research and development expenses. The allocation begins from the tax year in which the benefit incurred.

5. Abolition of Tax on Shares Transfer
Tax on the profits gained from the transfer of shares listed on foreign exchange stock markets or other internationally recognised financial institutions and transactions made through multilateral trading facilities is abolished with immediate effect.

For further information please contact:

Dimitrios Leventakis, Managing Director, ECOVIS HELLAS L.T.D., Athens, Greece
Email: dimitrios.leventakis@ecovis.gr

Anastasia Moschovaki, Tax Lawyer, ECOVIS HELLAS L.T.D., Athens, Greece
Email: moschovaki.anastasia@ecovis.gr