The new Tax Legislation passed on 6^th of December 2019, and became State’s Legislation. Its most important provisions are described below.

In details:

Α. AMENDMENTS OF INCOME TAX CODE

Article 1 Amendment of article 4 of ITC about tax residency

A natural person that resides in Greece for longer than 183 days per year, is considered to be a tax resident of Greece since the 1st day of his/her presence in the country. The present provision does not apply to people that find themselves in Greece exclusively for tourist, medical or healing purposes, given that their stay in the country does not exceed 365 days.

Article 3 Amendment of article 8 of ITC for uncollected accrued salaries

Uncollected accrued salaries from the year 2014 and on, if collected, are taxed according to the provisions of the year to which they pertain. 

Article 4 Amendment of article 13 of ITC for benefits in kind

Any benefit in kind given to employee, associate, shareholder or family member, exceeding 300,00 euro per year, and only for the exceeding amount, is calculated in his/her yearly tax income. In addition, providing private cars to the above persons, is considered to be a benefit in kind, taking into account their retail price before taxes. In addition, providing residence to the above persons is considered taxed income, which is assessed either as the total rent paid by the company, or if it is privately owned at 3% of the fair market value of the property. The above are valid for the tax years beginning on 01.01.2020 onwards.

Article 6 Amendment of article 15 of ITC about tax rates

The new tax rates for natural persons are shaped as follows:

For income up to 10.000 euro, at 9%, for income from 10.001-20.000 at 22%, from income from 20.001-30.000 at 28%, for income from 30.001-40.000 at 36% and for over 40.000 it is shaped at 44%.

The provisions herein apply to income acquired from 01.01.2020 onwards.

Article 7 Amendment of article 15 of ITC concerning expenditures via electronic means of payment

The required expenditure amount via electronic means is set to be 30% of the declared income and up to the upper limit of expenditures of 20.000 euro. The provisions herein apply to income acquired from 01.01.2020 onwards.

Article 9 Amendment of article 16 of ITC concerning the reduction of income tax

The tax that arises from the implementation of article 15, is reduced by 777 euro for a tax payer without kinds, by 810 euro for a tax payer with one kid, by 900 euro for a tax payer with 2 kids, by 1.120 euro for a tax payer with 3 kinds and by 1.340 euro for tax payer with 4 kids. The provisions herein apply to income acquired form 01.01.2020 onwards.

Article 10 Amendment of article 21 of ITC concerning the benefit from collecting debt resignation

The benefit for a company arising from the resignation of the creditor company from collecting debt is considered an income from business activity. The present provision comes in force immediately.

Article 13 Amendment of article 23 of ITC about non-deductible business expenditures

An expenditure of 300.00 euro or more is not tax-deductible if in whole or in part it was not paid using electronic means. In addition, rent expenditures are not deductible if their payment was not done by electronic means. The provisions of the present article come in force from 01.01.2020 onwards.

Article 15 Amendment of article 26 of ITC about deleting doubtful small receivable

Receivables that amount to 300.00 euro including VAT may be deleted after 12 months from the time they became outstanding. The deleted receivables may not exceed 10% of the total remaining end year claims.

Article 16 Tax reduction for building upgrade expenditures

The expenditures that take place from 01.01.2020 until 31.12.2022 for services concerning energy, operational and aesthetic upgrade of buildings deduce in equal amounts spread out in a period of 4 years and at 40% of their height the respective income tax of natural persons, up to the upper limit of 48.000 euro. Legal invoices and their payment in full via electronic means are an essential requirement. Valid from 01.01.2020 onwards.

Article 20 Amendment of article 58 of ITC concerning the reduction of companies’ tax rates

The profit tax rate of legal persons and legal bodies with double entry book-keeping, is reduced at 24% for the incomes of tax year 2019.

 Article 22 Amendment of article 64 of ITC concerning dividends’ tax rates

The tax deduction rate of dividends is shaped at 5%. The present provision is valid from 01.01.2020 onwards.

Article 23 Amendment of article 65 of ITC for countries with preferential tax status

A person is subject to profit or income or capital tax, whose rate is equal to or lower than 60% of the legal person’s tax rate that would be owed if that subject was a tax resident or had a permanent residence in Greece.  Valid from 01.01.2020 onwards.

Article 24 Amendment of article 71 of ITC about payment in advance of income tax

Exclusively for the tax year 2018 the already paid down payment of tax income that was certified by the submission of 2018 Income Tax Return, is decreased by -5% and is shaped at 95% instead of the initial 100% that was in force. This discount will be included in the submission of 2019 Income Tax Return.

Article 26 Amendment of article 72 of ITC concerning the suspension of surplus value tax

The enforcement of article 41 on calculating surplus value tax is postponed until 31.12.2022.

B. AMENDMENT OF VALUE ADDED TAX CODE (V.A.T.)

Article 29 Amendment of the V.A.T. Code provisions about the suspension of tax of real property transfer

Following the application of the properties for sale constructor who is subject to tax, the application of V.A.T. to undisposed properties of the subject with a construction license of 2006 onwards, is postponed until 31.12.2022. 

C. TAX PROVISIONS FOR OUT OF COURT SETTLEMENT

Article 32 Amendment of the provisions about instalments increase of fixed settlement

Outstanding debts certified by the Public Economic Authorities, Audit Centers and Customs Offices, may be settled - following the Debtors applications and paid as follows:

a) In 2 up to 24 monthly instalments, and

b) Up to 48 monthly instalments if these are debts from inheritance tax, from tax or custom audit and from non-tax or customs debts. Inclusion in the 48 instalments settlement is determined by Tax Authorities, depending on the ability of the Debtor to pay.

NOTE: This article does not cover advisory, but only informational purposes, and cannot serve, as a basis for further actions, on the part of   the reader. Reception of specialized advice is required.

Our company does not hold any responsibility for any actions, taken by the readers, based on the present article.

As part of our Company’s commitment to keeping you informed, we would like to inform you on the reduction of tax on distributed dividends.

          In particular:

          By virtue of Article 65(1) of Law 4603/2019 (Government Gazette, Series I, No. 49), the dividend tax rate dropped from 15% to 10%. Similarly, the tax withholding rate on dividends was set at 10% instead of 15% as previously in force.

          Pursuant to the provisions of paragraph 3 of this Article, the new tax rates shall apply for all income received during tax years starting from 01.01.2019 onwards.

Reduced tax rates shall apply to:

a) income distributed by Sociétés Αnonymes, Limited Liability Companies and Private Companies, for which the relevant distribution approval decision (for the current or previous tax years) was made by the competent body of the legal person from 01.01.2019 onwards.

If Sociétés Anonymes have distributed interim dividends or Limited Liability Companies or Private Companies have proceeded to temporary withdrawals instead of profits during tax year 2018, on which a 15% withholding tax rate has been applied, given that such distribution decision is subject to the approval of the Ordinary General Meeting of Shareholders or Partners respectively, which will take place during tax year 2019, the new reduced 10% tax rate shall apply.

b) For income from foreign dividends, the reduced 10% tax rate shall apply when the right of collection thereof (e.g. decision made by the competent body) was obtained after 01.01.2019, and even when this date is not easily identifiable, when their payment to the beneficiary, through bank account credit or otherwise, takes place after 01.01.2019.

Finally, in case that, until Law 4603/2019 reducing tax rates was published on 14.03.2019, the 15% tax rate (instead of the reduced 10% rate) has been applied, the 5% additional tax shall be returned as an unduly paid amount.

NOTE: This article does not cover advisory, but only informational purposes, and cannot serve, as a basis for further actions, on the part of   the reader. Reception of specialized advice is required.

Our company does not hold any responsibility for any actions, taken by the readers, based on the present article.

According to the relevant announcement of the Prime Minister, from 01.09.2019 the capital controls on banking transactions, which were in force for about 50 months, shall cease to apply.

In details :

a) The restriction up to 10,000.00 euros of cash per travel which applied to residents of the country when travelling abroad is repealed.

b) The restriction of export of funds by natural persons up to 4,000.00 euros per two months is repealed.

c) The restriction of export of funds up to the amount of 100,000.00 euros daily, for the conduct of commercial transaction by the submission to the Bank of the invoices and the relevant solemn declaration that the invoices have not been submitted to another Bank.

d) The payment of hospital charges and medical expenses abroad, by the submission of the necessary supporting documents to the Bank, as well as the transfer of the relevant amount to the bank account of the Hospital and not of the beneficiary itself is repealed.

e) The limit of 2,000.00 euros or its equivalent in foreign currency, for the companion of the person who travels abroad for hospitalization is repealed.

f) The limit of 8,000.00 euros per quarter for students abroad in case the amounts are paid in accounts of students residence or leased residence, by the submission of supporting documents is repealed.

g) The payment of tuition fees abroad is liberalized and the mandatory transfer of the amount to the account of the Education Institution is repealed.

h) The limit of transfer of amounts up to 5,000.00 euros per quarter for accommodation expenses and living expenses of students abroad and to the bank account of the student itself is repealed.

i) The prohibition of payroll payment abroad is repealed.

j) The payments in POS of foreign bank are liberalized and now that shall be done without a relevant authorization by the Committee for the Approval of Banking Transactions.

k) The limit of withdrawal abroad by card of amounts up to 5,000.00 euros is repealed.

l) The prohibition of transactions through the internet if the electronic stores are clearing card transactions in an account held in a Bank abroad is repealed. These transactions are : transfer of money abroad, purchase of works of art and auctions, transactions with betting companies, purchases in jewelry shops, purchases in general accounts suspected for the transfer of pornographic material, in personal escort services, in payments to charity organizations and in purchase of catering services.

NOTE: This article does not cover advisory, but only informational purposes, and cannot serve, as a basis for further actions, on the part of   the reader. Reception of specialized advice is required.

Our company does not hold any responsibility for any actions, taken by the readers, based on the present article.

As part of our company’s commitment to keeping you informed, we would like to advise you, in relation to the assignment of security technician duties (50067/28/2017), of the following:

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