GREECE Law and Practice Contributed by: Maria Zoupa, Daphne Cozonis, Ioanna Tapeinou and Diana Tsourapa, Zepos & Yannopoulos
Special Regime of Law 89/1967 The cost-plus regime of Law 89/1967, which provides a special framework for the establishment in Greece of shared-services centres rendering certain services specified in the law to associated companies, includes within its scope marketing and consulting services, software development, IT support, data management and storage and computer-based call centres. The regime provides for the full deductibility of business expenses that combine to form the taxable gross rev - enues for income tax purposes after the addition of a profit mark-up, which cannot be less than 5% and which is acknowledged in advance by the tax authori - ties. Eligibility under the regime presupposes annual expenditures of at least EUR100,000 and employment of at least four persons (one of whom can be part- time). State Aid Schemes for Private Investments The current EU-compliant framework for the estab - lishment of private investment aid schemes for the country’s regional and economic development focus - es on 13 specific areas of business activities, includ - ing green transition and modern technologies. The law includes state grants in the form of tax exemptions for eligible investments. Strategic Investments During 2019, new legislation was introduced with the aim of streamlining the existing framework for attract - ing strategic investments in all sectors of the Greek economy through the grant of incentives. The rules define strategic investments as those that are capa - ble of producing material quantitative and qualitative results when it comes to expanding employment, reconstructing production, and improving the coun - try’s natural and cultural environment. The legal frame - work was enhanced in 2021 to include additional cat - egories of investments, such as flagship investments promoting green economy, innovation, technology, and the low-carbon economy and environmental foot - print (if implemented until 31 December 2025). These investments are to be financed by the EU Recovery and Resilience Plan for Greece. Recent legislative amendments expand the frame - work for Emblematic Investments of Exceptional Importance. The updated rules expand Emblematic
super-deduction of the relevant social security contri - butions payable by employers, subject to a maximum limit specified in the law and relevant for specific hires. Business Parks Specific tax incentives, such as exemption from real estate transfer tax, are available to entities that acquire property and commence activities in special industrial areas and enterprise parks. Shipping Tax Regime A tonnage tax regime applies in respect of ship- owning companies as well as companies chartering bare vessels (bareboat charterers) or companies leas - ing vessels (ship lessees). The tax is calculated on the basis of the capacity and age of the vessels and exhausts any further income tax obligation of the ship- owning company, bareboat charterer or ship lessee, as well as such entities’ shareholders with regard to income arising from the operation and exploitation of the vessels. As regards vessels under foreign flags, tonnage tax is imposed only in relation to those vessels that are managed in Greece by foreign companies that have established offices in Greece for such management or by companies established in Greece – in both cas - es, under a specially regulated regime. Under such regime, the income of such management companies is exempt from tax. In addition, vessels flying flags of EU or EEA member states can also be subject to the tonnage tax regime in respect of defined types of ves - sels, regardless of the place of management. Greek companies and foreign companies that have established an office in Greece under the aforemen - tioned special regime and engage in activities other than the management of vessels – for example, bro - kering in chartering, sale and purchase and building in respect of ships under the Greek or a foreign flag with a total tonnage of more than 500 gross registered tonnes – are subject to an annual contribution calcu - lated on the basis of the amount of funds (in euros or other currency) that is required by law to be imported into Greece annually in order to cover their operating expenses.
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