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                                                                                                              September, 2015


oTax amendments introduced by Law 4336/2015 

  Law 4336/2015, issued on August 14th, 2015, introduces significant changes in Greek Tax Legislation, regarding reforms for the implementation of the Financing Agreement as well as Ratification of the Draft Agreement on the Financial Assistance by the European Stability Mechanism (E.S.M).

           The most important tax amendments pertain to the areas of: 
Corporate income tax, VAT, real estate property tax (ENFIA), tax leniency and tax settlement programs, and shipping taxation.


Corporate and Individual Income Tax 

The advance payment of corporate income tax for partnerships, non-profit entities and other entities will come up to 100% (as applicable for corporations), starting from 1 January 2016 onwards, whereas reduced rates of 55% and 75% apply for fiscal years 2014 and 2015, respectively. 

The above rates for partnerships etc. are now also applicable to individuals carrying out business activities. 

Corporate income tax for the tax year 2014 shall ne payable in five (5) equal monthly instalments, starting from August 2015 

The provision of article 21 of Law 4321/2015, with which a 26% withholding tax was imposed (as a condition for the tax deduction of the respective expenses) on transactions with affiliated persons or entities and/or tax residents in countries that are non-cooperative or have a preferential tax regime etc., is retroactively abolished, i.e. as of its introduction in the law. 

Following this amendment, the previously applicable regime of restrictions on the tax deductibility of payments made to entities and individuals that are affiliated and/or based in a country that is non-cooperative or has a preferential tax regime is reinstated. 

The 2% discount granted on settlement of the income tax due in one lump sum is abolished for individuals for income earned in calendar year 2015 onwards and for legal entities for income earned in periods commencing on or after January 1st, 2015.

VAT on Educational Services

The general exemption from VAT in relation to education services provided by private entities is abolished as of July 20th, 2015. The said exemption will apply only if certain conditions are cumulatively met (i.e. the institutions should not pursue profits, their profits should be retained to improve the institution, their management and administration should be carried out without compensation etc.). 

The said VAT exemption continues to apply in relation to pre-school education services.

The reduced VAT rates applying to islands are gradually abolished as of October 1st, 2015 depending on the classification of each island pursuant to the priority groups set by the Ministry of Finance. The abolishment is planned to be completed for all islands by January 1st, 2017. 

Real Estate Property Tax (ENFIA)

The first of the six (6) monthly ENFIA instalments must be settled by October 30, 2015, while the last one must be settled by the last working day of February 2016. 

The 20% discount on taxes applicable to properties owned by individual Greek tax residents, and which are vacant and are not supplied with electricity is extended for one (1) more year i.e. to tax year 2015.

Hotel units, operating as privately owned enterprises, are now subject to the supplementary tax (imposed on owners of properties of a value exceeding euro 300,000 in total).

Modifications of the Tax Leniency Programs 

The new Law introduces changes in the terms of tax leniency programs that have been introduced by Law 4305/2014 and Law 4321/2015. Changes in question affect future payments to be made under the said leniency programs. For example, the interest rate applicable to settled overdue tax liabilities is increased to 5.05%, the conditions that need to be met by taxpayers under the said leniency programs became stricter and require full compliance by taxpayers with regard to the settlement of their overdue tax liabilities, e.t.c. 

Regular Tax Debt Settlement Regime

Certain changes are introduced by the new law in the regular tax debt settlement regime, provided under the Greek Code of Tax Procedure (art. 43 of L. 4174/2013). The said regime may apply for any type of outstanding tax debt and allows gradual repayment.  

According to the new law, application of the said regime for tax debts exceeding euro 150,000 is facilitated, by releasing taxpayers for the next two (2) years from the obligation to provide guaranties or other in rem securities to the State. Furthermore, tax debts that are repaid under the terms of the payment schedule provided in the said law, will be subject to interest up to 5.05% rate on an annual basis, instead of the default interest rate of 8.76% generally applicable to outstanding tax debts, according to Law 4174/2013.

Shipping Taxation 

The imposition of tonnage tax under Law 27/1975, which applies to ships carrying Greek flag as well as to ships carrying foreign flags and are managed by foreign companies established in Greece under the provisions of the same law, is extended so as to apply also to vessels carrying EU Member States flags or flags from states of the European Economic Area (EEA) and irrespective of the way such ships are managed. 

The said extension applies to maritime transport services rendered from January 1st, 2015 onwards.

The tonnage tax rates will increase by 4% for years 2016 and up to 2020, while, the special levy in favor of the Navy Retirement Fund (NAT) imposed under the provisions of Law 29/1975 will also increase by 4% for the same period. 


oEvents and suggestions 

The Benaki Museum exhibits from 09.10.2015 until 11.08.2015 the works of 
the British sculptor Tony Cragg, who is one of the most acclaimed artists of his    generation.

In his recent works Cragg has been pushing towards a new abstracted understanding of the figure. For the last years, he has been playing with the notion of compression and expansion in the use of totemic structures where the appearance of the human profile is often a reclusive aspect of the overall structure. He has also taken the figure in an almost futuristic manner and divided it into quadrants at its very core.
 (Benaki  Museum  - Pireos str. Annexe – 138 Pireos Str., 118 54, Athens,Greece). 
  For more info: http://www.benaki.gr/index.asp?id=202010001&sid=1735&cat=0&lang=en  


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