International Society of Primerus Law Firms

2010 Amendments to Tax and Corporate Laws in Greece

Submitted by: Karagounis & Partners Law Offices

(Athens, Greece)


LAW 3842/2010
Several amendments have been introduced according to the new tax law 3842/2010 in the Greek system of business tax, real estate taxation and income tax. The scope of the present article is to make a brief reference to the most important changes of the amendments occurred in the business taxation, real estate and income tax.

A. Business Tax

1. Extending V.A.T. (article 62 par. 3 Law 3842/2010)
V.A.T. is extended to financial activities which were not covered or exempted and which are not exempted by the EU directive on V.A.T. Such activities include those of lawyers and notaries whose services were not liable to tax until now.

2. Taxable Profits: Undistributed and Distributed Profits (article 13 par. 7 Law 3842/2010)
The taxation of undistributed profits is steadily decreased from 25% to 20% until the year 2013. In 2010 the tax rate is decreased to 24%. The withholding tax on distributed profits (dividends) is 40% and occurs on the level of a legal person.

3. Taxation of Benefits in Favor of Corporate Executives (article 9 par. 7 Law 3842/2010)
Due to the fact that certain management staff of companies purchase luxury cars in the name of their company so as not to display such purchases in their personal tax statements, provision is made so that the cost of transportation, maintenance and the salaries which are paid as set out in the company books, constitute income of the car user (Managing Director, Administrator, Chairman of the Board of Directors, Executive).

4. Business Tax Certificates from Statutory Auditors. Certification by Accountants- Tax Consultants (article 17 Law 3842/2010)
Statutory auditors and, for smaller companies, certified accountants or tax consultancy offices, will confirm the company’s tax liabilities. In accordance with the new Law, the statutory auditors will issue a certificate which will include comments and violations in respect of the provisions of the tax legislation. The accountants- tax consultants will verify the accuracy and veracity of the reported statements and confirm whether they conform to the financial data which derive from the information and books of the company. Under a system of targeted inspections, the tax authority will carry out random checks. If such checks reveal tax evasion penalties will be imposed on both the companies as well as the audit firms.

5. Support for Young Entrepreneurs (article 69 Law 3842/2010)
A three year tax-free scheme is established for the creation and operation of new businesses run by persons up to the age of 35.

6. Environmental Incentives- Green Development (article 73 par. 8 Law 3842/2010)
New incentives are introduced in relation to the protection of the environment such as tax incentives for the upgrading of energy use in buildings and the reduction of the environmental footprint caused by businesses. In addition, incentives and concessions are granted for the protection of the constructed environment with allowances for the preservation of unstructured land which are within city plans in densely constructed areas and for the protection of its architectural legacy.

7. Motives for the Research (article 71 par. 8 Law 3842/2010)
There will be an increase in discount on taxable profits for businesses that incur expenditure from technological innovation as decreed by the Minister for Education, Lifelong Learning and Religion.
The portion of the profits which derives from the sale of goods which incorporate an internationally recognized patent of the business are exempt from tax for three financial years.

8. Tax Incentives for the Investment in and Retention of Work Places
The new tax legislation introduces tax exemptions in respect of the preservation of work places for businesses suffering from a decrease in work places.

B. Income Tax of Individuals

1. New Tax Scale (article 1 Law 3842/2010)
A new tax scale and corresponding tax rates are introduced for all individuals (no difference among the various sources of income).The tax-free threshold (firs bracket) for all taxpayers is set at 12.000 €. The new scale is modified as follows:

New Law
Income value Rate

Income (€) Tax rate (%)
Income (€) 0
12.001 – 16.000 18
16.001 – 22.000 26
26.001 – 32.000 33
32.001 – 40.000 36
40.001 – 60.000 38
60.001 – 100.000 40
Above 100.000 45

According to the new scale, it includes more tax categories (than the old one) so as to provide for the more equitable distribution of tax charges and to increase taxation in high incomes.

The tax free threshold of 12.000 e is related to the collection of receipts. Such receipts are for all categories of goods and services except those which relate to goods of substantial value, regular utility bills for telephone service, electricity supply, water supply etc., and up to the extent to which they are accepted for the reduction of income or the tax discount (medical expenses, rent, insurance etc.)

Actually the tax – free threshold has as follows:

- For the amount of 6.000 € income is free of receipts while,
- For the amount of up to 12.000 €, the taxpayer is required to declare receipts up to the value of 10% of his income.
- For the amount of 12.000 € and above the taxpayer is required to declare receipts up to the value of 10% of his income for the first 12.000 € and 30% of the income for the rest part of the income.

A discount is provided for the declaration of receipts above the requested threshold. When the costs exceed the required amount and are up to the amount of 15.000€ for an individual or 30.000€ for a family, the taxpayer is entitled to a tax reduction equal to 10% of the difference between the required amount and the amount that has been declared.

When the costs are less than required amount, the taxpayer is charged with a tax amount equal to 10% of the amount of costs that are outstanding.

C. Real Estate Taxation

Two of the most important amendments in this field are:

1. Replacement of Special Tax of Real Estate Property (ΕΤΑΚ) with a Progressive Tax on Real Estate Property (article 56 and 36 Law 3842/2010)
Special Tax of Real Estate Property (ETAK) is abolished. An annual tax on possession of substantial real estate property is imposed on an individual level on the following scale:

Property Value (€) Tax Factor (%)
Up to 400.000 Up to 400.000
400.001 – 500.000 0,1
500.001 – 600.000 0,3
600.001 – 700.000 0,6
700.001- 800.000 0,9
800.001 and above 1,0

For real estate property above 5.000.000 € a 2% rate shall apply for three years.

2. Taxation of Real Estate Property owned by Offshore Companies (article 57 3842/2010)
The tax rate in respect of property owned by offshore companies is increased from 3% to 15% per year. At the same time, a time limit is established for the transfer of property to a natural person on favourable conditions. Cadastral offices or land registry offices are required to inform the Central Tax Authorities within six months of all the real estate properties within their competence which are owned by offshore companies. They are also required to notify the Central Tax Authorities of any new registration or other modification in their files. Meanwhile, a special authority referred to as the Research & Price Control Service is established in order to collect information in respect of companies situated in tax preferential regimes where companies, in which an offshore company is a shareholder, are screened.

Law 3853/2010 on “Simplification of the procedures for setting up businesses” aims at the simplification of the procedures for the establishment of corporations of any legal form seeking to promote and support entrepreneurship, as well as to combat bureaucracy.

The main innovation thereof consists in the introduction of “one-stop-shops”, which will carry out any action required for the establishment of companies. The competent General Commercial Registry of each Chamber of Commerce (Geniko Emboriko Mitroo-Γ.Ε.ΜΗ.) as well as the Citizens’ Service Centres (Kentra Exypiretissis Politon-Κ.Ε.Π.) will be the “one-stop-shop” for the establishment of a general partnership (O.E.) and a limited partnership (E.E.), whereas the Notary Public before whom the establishment deed will be executed, will act as the “one-stop-shop” for limited liability companies (LLC – EPE), société anonyme companies (A.E.), as well as for all other legal entities whose establishment is effected by virtue of a notary’s deed.

A flat duty will be paid for the establishment of companies (Company Establishment Flat Cost Receipt) which will include all tax, social security and administrative duties and other contributions and surcharges, excluding the Capital Concentration Tax, legal and notarial fees and the Duty in favour of the Competition Committee, where applicable. Compulsory presence of a lawyer at the time of execution of the notary’s deed for the incorporation of LLCs or sociétés anonymes will only be required in case the capital of such companies exceeds EUR 100.000,00.

More specifically, the “one-stop-shops” will collect documents required for the establishment of entities, register such documents with the relevant General Commercial Registry authorities, issue the entity registration number and social security registration number (A.Μ.Κ.Α.), request the issuance of the tax registration number from the tax authority, collect the necessary tax clearance certificates, register individuals (partners, administrators or members of the BoD) with the social security organisation, allocate the flat duty for the establishment of companies, register the company with the (local) Chamber of Commerce etc. In principle, the “one-stop-shops” must proceed with the aforementioned actions on the same day or within the next business day after the completion of the related actions on behalf of the contracting parties.

Entities will be considered to have been established from a legal (corporate) point of view following the registration of the corporate documents with the General Commercial Registry, whereas publication of these documents with the Government Gazette (a prior existing prerequisite) will no longer be required.

The new Law will only come into force after the issuance of the ministerial decisions within a four month deadline from its publication in the Official Government Gazette, for issues such as: the activation of the General Commercial Registry, the determination of the details for the connection and co-operation between the “one-stop-shops” and the other public authorities involved in the establishment of companies, and the introduction of the option to use pre-standardized Articles of Association for companies of any legal form.

For more information on Karagounis & Partners Law Offices, please visit the International Society of Primerus Law Firms or

The general information contained herein is intended for informational purposes only. It is not intended to be, and should not be construed as, legal advice or legal opinion on any specific facts or circumstances.

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