Greece’s Law 5162/2024 introduces amendments to the taxation framework for venture capital mutual funds governed by Law 2992/2002, known as AKES funds.

New tax rules for venture capital mutual funds (AKES funds)

AKES funds established on 1 January 2024 can select their preferred taxation method at formation.

One key provision of this new regulation includes a special tax on AKES funds. The fund manager pays an annual tax on the AKES fund’s unrealised capital gains as of 31 December annually.

The tax rate on unrealised capital gains is 5% of the European Central Bank’s (ECB) primary refinancing interest rate. The current reference rate is 3.15%, and the applicable tax rate is 0.1575%. This tax fulfills all tax obligations of the unit holders, which exempts them from paying capital gains tax on the transfer of AKES shares.

The law outlines rules for the new alternative taxation method, including withholding tax exemptions, foreign tax credits, ECB reference rate changes, and the tax payment process.

Tax transparency of AKES funds 

The AKES fund is not taxed, but its holders are taxed as co-owners of the fund’s assets. This taxation method remains in effect and will be mandatory for AKES funds until 31 December 2024.

AKES is a specialised domestic fund structure offered by Greece for private equity and venture capital investments. This closed-end venture capital mutual fund is established as a partnership, providing a streamlined framework for such ventures.

AKES is tax-transparent for all limited partners and allows non-domestic partners to avoid a permanent establishment in the country. Additionally, management fees in Greek companies are exempt from VAT.