GREECE Law and Practice Contributed by: Ioannis Charalampopoulos, Petros Machas and Alexandros Saratsiotis, Machas & Partners
the payment of tax from the fund, and no withhold - ing applies to any dividends or benefits distributed to investors. With regards to REICs, no dividend with - holding tax is imposed on dividends distributed to investors, while the transfer of listed shares of REICs is exempted from capital gains tax if the investor holds a minority shareholding of less than 0.5% of such REIC and is solely subject to transaction duty of 0.2% on the gross sale proceeds. General Rules for Taxation of Investors The acquisition of units in venture capital mutual funds or mutual fund AIFs does not entail the investor acquiring tax residence or a permanent establishment in the Hellenic Republic. Any capital gains from the transfer or redemption of venture capital mutual fund units are fully exempt from tax and any other levy, but capital losses are not tax-deductible. Preferential Tax Regimes Non-dom regime Investments of EUR500,000 in Greek alternative investment funds exclusively investing in Greece, including mutual fund AIFs with minimum assets of EUR3,000,000 and REICs, may qualify as eligible investments for the purposes of the alternative taxa - tion regime for foreign-sourced income of natural per - sons who transfer their tax residence to Greece under Article 5A of Law 4172/2013 (Non-Dom Regime). The tax benefit of submitting to the Greek Non-Dom Regime is that the individual foreign investor becomes a tax resident in Greece and is liable solely for a fixed annual lump sum tax of EUR100,000 for their foreign- sourced income, regardless of its amount. Start-up investments income tax deduction Law 4712/2020 offers a 50% deduction from taxable income for capital contributions to start-ups that are listed in the National Start-Up Registry, up to a maxi - mum of EUR300,000 per tax year. Capital contribu - tions can involve up to three different start-ups, with a maximum of EUR100,000 per company. This provision is directed towards angel investors: individuals who invest in dynamic, innovative companies, often pro - viding not only capital but also business consulting. In addition, pursuant to Article 38 of Law 5162/2024 (Government Gazette Α’ 198), the income from any gain arising from the transfer of units in venture capital
mutual funds (VCMF – Α.Κ.Ε.Σ.) is exempted from any tax, duty and contribution. 4.9 Double Tax Treaties The Hellenic Republic has signed double tax treaties with a large number of foreign jurisdictions. The appli - cability of such double tax treaties will depend on the legal form of the alternative investment fund, includ - ing most importantly whether the fund has separate legal personality and is subject to taxation itself. More specifically, to the extent that the alternative fund is tax-transparent, taxation solely applies at the level of investors, and any transaction involving fund units is treated as if the investor had directly disposed of their proportionate share of the fund’s assets. In such cases, relief under double tax treaties may only be available directly to the investors. 4.10 Foreign Account Tax Compliance Act (FATCA)/Common Reporting Standard (CRS) Compliance Regime Greece has implemented both the Foreign Account Tax Compliance Act (FATCA) and the OECD Com - mon Reporting Standard (CRS) through domestic legislation, requiring financial institutions to identify and report certain account information to the Greek Independent Authority for Public Revenue (IAPR). FATCA was adopted pursuant to the intergovernmen - tal agreement (IGA) signed between Greece and the United States in 2014. Under the IGA Model 1 frame - work, Greek “reporting financial institutions” (including certain AIFMs, custodians, and other entities hold - ing financial accounts) must identify US-reportable accounts and annually submit the relevant information to the IAPR, which then transmits it to the U.S. Internal Revenue Service. CRS was implemented into Greek law via Law 4378/2016, aligned with EU Directive 2014/107/EU. Greek reporting financial institutions are required to collect self-certifications, perform due diligence to determine tax residency, and annually report account information on non-resident account holders to the IAPR. This data is automatically exchanged with oth - er participating jurisdictions. Failure to comply with FATCA or CRS obligations can lead to administrative fines and potential reputational risks. Compliance
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