GREECE Law and Practice Contributed by: Nikolaos Koulocheris, Ioannis Charalampopoulos, Rozita Karasso and Dimitra Kotsovelou, Machas & Partners
tion and resolution of deficiencies to facilitate smooth occupancy approval.
corporate restructurings and contributions of real estate into holding entities under specific tax provisions can also minimise transaction costs by qualifying as tax-neutral reorganisa - tions. Proper structuring ensures compliance while optimising tax efficiency in high-value real estate transactions. 8.3 Municipal Taxes In Greece, businesses occupying commercial premises are subject to municipal taxes, pri - marily the Municipal Cleaning and Lighting Fee (TEL) and the Municipal Real Estate Tax (TAP), both collected via electricity bills. TEL is based on property size and usage, while TAP is a small percentage of the property’s objective value. Exemptions apply to public buildings, religious institutions and non-profit organisations. Addi - tionally, businesses in special economic zones or involved in public interest activities may ben - efit from reduced rates or exemptions. Munici - palities set rates independently, so tax burdens may vary by location. Proper classification of premises helps optimise tax liabilities. 8.4 Income Tax Withholding for Foreign Investors In Greece, foreign investors are subject to with - holding tax on dividends (5%) and interest (15%), subject to double taxation avoidance treaties. Rental income is taxed at progres - sive rates for individuals 15% (for annual rental income of up to EUR12,000), 35% (for the part of annual rental income exceeding EUR12,000 and up to EUR35,000) and 45% (for the part of annual rental income exceeding EUR35,000), while corporate income tax of 22% applies to the taxable income of any real estate entity. Cap - ital gains tax on real estate disposals is currently suspended for individuals, but corporate income tax of 22% applies on gains from the disposition of real estate properties by companies.
8. Tax 8.1 VAT and Sales Tax
Pursuant to the provisions of Law 5144/2024 (Greek Law for VAT), VAT is imposed on the supply of goods, provided that this is carried out by means of a transaction made for consid - eration. The sale or purchase of real estate can qualify as supply of goods for the purposes of VAT, to the extent that it involves the transfer for consideration of the ownership of completed or unfinished buildings or parts thereof before the first occupation by a transferor who carries out, on a regular basis, the aforementioned transac - tions. The applicable VAT rate is equal to 24% of the taxable value and is payable by the pur - chaser. No real estate transfer tax is imposed on transactions on which VAT is imposed. By virtue of Article 70 of Law 5144/2024, the appli - cation of VAT to the sale of real estate properties under construction can be suspended until 31 December 2025, while any suspensions until 31 December 2024 already granted were extended until 31 December 2025. Transfer taxes shall apply to any transfer of real estate properties not subject to VAT due to such suspension. 8.2 Mitigation of Tax Liability In Greece, tax-efficient structures are commonly used to mitigate transfer, recordation and stamp duties on large real estate acquisitions. A key strategy is acquiring properties through share deals rather than asset deals, as transferring shares in a company holding real estate is gener - ally exempt from VAT and real estate transfer tax. Additionally, acquisitions through REICs benefit from preferential tax treatment including exemp - tion from the payment of transfer tax. Mergers,
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