GREECE Law and Practice Contributed by: Nikolaos Koulocheris, Ioannis Charalampopoulos, Rozita Karasso and Dimitra Kotsovelou, Machas & Partners
erly manage environmental risks, even if they did not cause the contamination themselves. 3.9 Effects of a Borrower Becoming Insolvent In Greece, when a borrower, security provider or guar - antor becomes insolvent, lenders may face the fol - lowing risks: • Automatic stay on enforcement : Upon the dec - laration of insolvency, a temporary stay may be imposed on creditors’ enforcement actions, which can delay them from realising their security. While secured creditors maintain priority, their ability to immediately enforce security may be limited, par - ticularly during restructuring efforts. • Claw-back of transactions: Lenders face the risk of claw-back actions, which can nullify transactions made in the period leading up to the insolvency declaration. This can include preferential payments or transfers of assets that occurred within a “sus - pect period” prior to insolvency. • Challenges to guarantees : Guarantors may attempt to escape liability if the guarantee is not structured to cover amendments to the loan or changes in the financial status of the borrowing company. • Decline in asset value : Delays in the liquida - tion process or deteriorating market conditions may reduce the value of the assets securing the credit, further impacting the recovery for secured creditors. If liquidation is not completed within 18 months, piecemeal liquidation might be imposed, which can yield lower returns. 3.10 Taxes on Loans Digital Transaction Duty is levied on interest-bearing and interest-free loans, as well as all types of credits, including those equated with loans and credit cards, at a rate of 2.4% or 3.6%, with a cap of EUR150,000 per loan. For the sake of clarity, Digital Transaction Duty is not imposed on loan interest, bond loans issued under Law 4548/2018 and bank loans. Bank loans (other than bond loans) are subject to a levy pursuant to Law 128/1975 which is imposed on credit (rate around 0.6%). Payments of interest under bond loans are subject to withholding tax, which amounts to 15%. There is no
withholding tax for other types of bank credit arrange - ments. The hypothecation registration fees under credit facili - ties are proportional to the secured amount (current - ly around 0.775% of the secured amount), with the exception of collateral for bond loans, where a sig - nificantly advantageous flat fee for each registration of security interests with the relevant public registries applies, which amounts to EUR100. As regards the hypothecation deeds, where a public notary needs to be involved, the notarial fees are in the range of 0.2%–1% of the secured amount. However, if the notarial hypothecation deed is provided as collateral for a bond loan financing, then only a fee amounting to EUR2,500 per deed will apply. In Greece, according to Article 24 of the Constitution, the spatial restructuring of the country, the planning, development, urban planning, and the expansion of cities and residential areas in general fall under the regulatory authority and control of the State, with the aim of ensuring the functionality and development of settlements and securing the best possible living con - ditions. Furthermore, land use, development, design, and construction are governed by a comprehensive framework that combines national legislation, regional spatial planning, and local regulatory controls. The pri - mary legislative instrument is the New Building Code (Law 4067/2012, as in force), which establishes the fundamental rules on zoning, land use classifications, building height, density, design standards, materials, and construction safety. This is complemented by the Spatial Planning Law (see indicatively Law 4417/2016, as in force), which introduces a system of regional and local spatial plans aimed at promoting sustain - able development and balanced regional growth. Environmental considerations are addressed through the Environmental Protection Law (Law 1650/1986), which requires Environmental Impact Assessments for significant developments, particularly in environmen - tally sensitive areas. 4. Planning and Zoning 4.1 Planning and Zoning Framework
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