Greece adopts corporate tax rate cut and other support measures – Multinational company taxation


By Emmanouela Kolovetsiou-Baliafa, Partner, KG Law Firm, Greece

The Greek government retroactively reduced the corporate tax rate, suspended the taxation of the Special Solidarity Contribution (SSC) and introduced other support measures through Law 4799/2021, published in the Journal official May 18.

Reduction of the corporate tax rate

The corporate tax rate is retroactively reduced from 24% to 22% for the 2021 and subsequent tax years. Credit institutions (banks) remain subject to a corporate tax rate of 29%, provided that the deferred tax provisions apply (article 27A of the income tax law).

Reduction of the prepayment rate of income tax

The rate of early reimbursement of the income tax of individuals exercising a professional activity is reduced from 100% to 55% of the tax due for the tax year 2021 and following.

Likewise, the prepayment rate of corporate tax on legal persons and legal persons is reduced from 100% to 80% of the tax due for the tax year 2021 and following. For the 2020 tax year, the corporate tax withholding rate is reduced to 70%.

The income tax prepayment rate for Greek banking institutions and branches of foreign banks operating in Greece remains at 100% for fiscal years from 2020.

Suspension of the imposition of CSS

CSS taxation is suspended for specific income categories for tax years 2021 and 2022. The table below reflects the income categories on which CSS is / will be taxed or waived for fiscal years 2020, 2021 and 2022.

Sales tax on stock market transactions

The rules regarding the sales tax on stock transactions are amended (0.2% on the sale value of the shares), on the basis that the “Hellenic Central Securities Depository” (AthexCSD) is authorized as the central depositary of securities (CSD) since April 4.

In particular, in accordance with the new provisions, the context of application of the sales tax is clarified.

In addition, the new law introduces certain provisions concerning the process of collecting and allocating tax and redefines the persons liable and liable for sales tax. It also extends the payment term.

In addition, in the event of non-compliance with deposit obligations, the new law provides for the imposition of certain administrative sanctions (namely penalties and interest on late payment) on the AthexCSD or on intermediaries (as the case may be).

Suspension of payment of rents due in May 2021

Under the provisions of the new law, rents due in May 2021 are fully suspended for businesses that have ceased operations due to the state’s mandate, as well as those affected by the COVID-19 pandemic.

A ministerial decision should provide the NACE codes of companies eligible for this measure. However, this rent suspension does not apply to companies that are already eligible for the 40% rent reduction based on their active NACE code as announced in previous ministerial decisions.

– Emmanouela Kolovetsiou-Baliafa is an associate of the law firm KG, Greece

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