Legal Update: Amendments to the Greek Tax Legislation
On 28/11/2018, the Greek Parliament voted important amendments to the Greek tax legislation such as the reduction of the property tax for the year 2019 for certain owners of real estate in Greece as well as a gradual decrease of the Greek corporate income tax.
More specifically, with a view to encourage investments and improve competitiveness of businesses, article 58 of the Greek Income Tax Code is amended so as to gradually decrease the tax rate applicable to profits from business activity of corporate entities from 29% (corporate income tax rate applicable today) to 25% for income earned as of the financial year 2022 and the following years.
As such, the Greek corporate income tax rate shall be reduced by 1% per year, applicable as of the income of the financial year 2019. Thus the income of the financial year 2019 shall be subject to a rate of 28%. Accordingly, for 2020 the tax rate shall be 27% and for 2021 the tax rate shall be 26%.
The Parliament, aiming to provide relief to the tax payers who are owners of low value real estate in Greece, further voted a decrease of the Greek property tax (ENFIA) for the year 2019.
According to the amendment introduced, specifically for the year 2019, when the total value of the real estate property held by a natural person which is subject to property tax, is up to the amount of 60 000 euros, the corresponding property tax shall be reduced by 30%. When the total value of the said real estate exceeds the amount of 60 000 euros, for the excess thereof, the amount of reduction of the tax (30%) shall be reduced by 0.7 euros per 1000 euros of the real estate and may not exceed 100 euros.