TAX-I NEWSLETTER

Tax-i 206: New Tax Law

The Greek Parliament voted on 4.12.2024 the Law 5162/ 2024 titled “Measures for strengthening the income, tax incentives for innovation and transformations of companies and other provisions”.

The said law introduces several new rules in crucial tax, social security and other issues. The present newsletter highlights only certain of the most important law provisions.
Specifically:

Α. Tax provisions for individuals

  • As of tax year 2024 and onwards the entrepreneurship duty is abolished for individuals entrepreneurs and freelancers.
  • In the case of lease agreements of residences with a maximum surface of 120 square meters and a minimum term 36 months an income tax exemption for individuals is provided for the first 36 months of the said lease after the month of the conclusion of the relevant agreement. This provision applies to real estate properties previously declared as “empty” or subject to short-term leases.
    If within the said 36 months the property is emptied, then the exemption ceases for the tax year of the evacuation. On the other hand if within the said 36 months the property is subject to a short-term lease, then the exemption ceases from the first year of the lease.
  • For the year 2024 the Unified Real Estate Tax (URET) is reduced by 10% for residences of individuals insured against earthquake, fire and floods, if the insurance covers the total value of the property.
    For the years 2025 and onwards residences of individuals insured as above are subject to a reduced by 20% URET, provided that their taxable value for the imposition of URET does not exceed 500.000 Euro, and by 10% if it exceeds the said threshold.
    A prerequisite for the above reductions is that the insurance concerns the previous year with a minimum duration of 3 months. If the insurance is shorter than a year, the URET reduction is adjusted accordingly.
  • The timeframe for the submission of the income tax returns for the previous tax year starts on the 15th of March and ends on the 15th of July each year. If a tax payer pays the total income tax due by 31st July, an income tax discount of 4% is granted, provided that the tax return was submitted by the 30th of April. If the return is submitted until the 15th of June, the tax discount is 3% and it falls to 2% if the return is filed by the 15th of July.


Β. Tax provisions for companies

  • The provisions regarding the Climate Crisis Resilience Fee, which is owed by hotels, furnished rooms/ apartments for rent, properties for short-term lease etc. are modified.
  • A cruise duty is imposed to cruise ships and burdens each passenger. A ministerial decision will set the implementation details regarding this provision.
  • Special rules are introduced for the valuation of assets and company participations in the case of transformations and provisions for the taxation of the capital gain arising from mergers, divisions, conversions, split-offs and exchange of company participations.
  • The incentives for scientific and technological research expenses are extended. Specifically, these expenses will be deductible from the gross income of companies , increased by 150%, at the time of their incurrence, provided that they are related to projects/ provision services to legal entities registered with the National Startup Registry or research centers, institutes or University centers or Research Institutes.


C. Other tax provisions

  • The suspension of VAT on real estate property is prolonged until 31.12.2025 and real estate transfer tax is imposed.
  • The suspension of imposition of tax on capital gain arising from the transfer of estate property is prolonged until 31.12.2026.
  • The income tax exemption of dividends and profit/ capital gain received by a Greek parent entity applies also on those dividends paid by a subsidiary seated outside the EU region.


D. Social security and private insurance provisions

  • As of 1.1.2025 the healthcare social security contributions of employees is reduced from 7,10% to 6,10%. These contributions apply on any remuneration paid and is split into 5,45% for provisions in kind, from which 1,65% burdens the insured person and 3,80% the employer. The remaining 0,65% concerns monetary provisions, from which 0,40% burdens the insured employee and 0,25% the employer.
  • The insurance tax is abolished in the case of private health insurance schemes of minors.
  • The obligation of insurance against extreme physical phenomena is extended to companies with annual gross income exceeding 500.000 Euro.

 

Download the Tax-i in pdf here.