Greece’s Ministry of National Economy and Finance has announced new legislation for tax reform measures for 2025.

The bill, entitled “Measures to enhance income, tax incentives for innovation and business transformations and other provisions”, also include reforms that modernise tax legislation that:

• Offer incentives for business mergers and acquisitions to boost innovation and empower startups;
• Expand tax incentives for scientific and technological research while establishing new expenditure limits for business development and innovation and investors;
• Modernise the administrative model governing the Independent Authority for Public Revenue (AADE) will enhance its efficiency.

The main measures include:

Tax cuts in 2025

• The pretence fee or business (trade) tax for all natural persons, including freelancers and self-employed, has been abolished;
• A three-year income tax exemption will be available for vacant or rental properties up to 120 sqm leased between 8 September 2024 and 31 December 2025, provided the lease term is at least three years;
• A double reduction of Uniform Real Estate Property Tax (ENFIA) from 2025 (from 10% to 20%) for residences of natural persons, with a taxable value of up to EUR 500,000 and are insured for natural disasters (fire, earthquake, flood);
• The removal of a 5% fixed telephony fee for optical fibre connections (≥100 Mbps);
• The suspension of capital gains tax from the transfer of real estate until 31 December 2026;
• The exemption of the VAT for the construction of new buildings in 2025;
• Tax return submissions are standardised, requiring individuals and businesses to file annually between 15 March and 15 July, with tax payments made in eight equal monthly instalments starting 31 July. Citizens can receive a discount for timely submissions:
  • A 4% discount is available if tax returns are submitted between 15 March and 20 April;
  • A 3% discount is available if tax returns are submitted between 1 May and 15 June; and
  • A 2% discount is available if tax returns are submitted  between 16 June and 15 July;

Tax incentives for mergers, acquisitions, scientific research, and startups

• New and revised tax provisions have been introduced to incentivise business mergers and acquisitions, enhance innovation, and empower start-ups. Tax incentives have also been expanded for scientific and technological research and for establishing new deductible expense limits for the development and innovation of businesses and investors. These include:
  • Establishing a single framework for business transformations (mergers, splits, branch contributions, exchange of securities, business conversions), domestically or cross-border (within/outside the EU subject to conditions) by replacing relevant laws that maintain the relevant tax advantages while being compatible with the  Greek company legislations and EU Directives;
  • The minimum capital limit of the new company resulting from a partnership/transformation has been reduced to EUR 100,000 from EUR 125,000 to ensure a 30% tax exemption on profits.
• Incentives for scientific and technological research expenditures are expanded with an increased super deduction of 250% to 315% of R&D expenditure for:
  • • Partnership projects with startups;
    • Collaboration projects with research centres;
    • “Knowledge-intensive” SMEs with R&D expenditures less than 20% of the total spending.
• The incentive for commercial patent exploitation is extended. With the new arrangement, in addition to the current three-year exemption of the company’s profits from the commercial exploitation of the patent, a 10% reduction in income tax is now extended for an additional seven years after the end of the three years.
• The proposal includes increasing tax incentives for angel investors in start-ups, raising the maximum contribution eligible for a 50% deduction from EUR 300,000 to EUR 900,000.
• The proposal includes a participation exemption for intra group dividends received by Greek tax residents from entities outside the EU and for capital gains from transferring participation securities to a legal entity established outside the EU.