Greece has enacted Law 5313/2026, introducing amendments to the taxation of alternative investment funds (AIFs) and their executives, clarifying Permanent Establishment rules, revising the special tax regimes under articles 5A and 5B of the Greek Income Tax Code (ITC), and adopting new measures covering carried interest, housing, agriculture and VAT. The changes generally apply to tax years beginning on or after 1 January 2026.
Greece has introduced changes to its tax framework through Law 5313/2026, published in the Greek government’s official gazette on 25 June 2026. The legislation amends the taxation of alternative investment funds (AIFs) and their executives, clarifies the concept of permanent establishment, and updates the special tax regimes under articles 5A and 5B of the Greek Income Tax Code (ITC).
Unless otherwise specified, the new provisions apply to tax years beginning on or after 1 January 2026.
The amendments are intended to provide greater legal certainty, support Greece’s position as an investment destination, and bring the domestic tax framework more closely into line with international market practice.
Permanent Establishment rules clarified
The law amends the Income Tax Code to specify activities that do not constitute a Permanent Establishment in Greece.
Under the new provisions, facilities used exclusively for regulatory compliance and supervision by competent authorities are excluded from the definition of a Permanent Establishment.
The legislation also provides that portfolio management or advisory services supplied by Greek legal entities to EU Alternative Investment Fund Managers (AIFMs), or to supervised managers established in non-cooperative third countries, will not in themselves create a Permanent Establishment in Greece for those foreign managers.
In addition, the management or portfolio management of EU Alternative Investment Funds (AIFs) and supervised third-country AIFs will not be regarded as the exercise of “effective management” in Greece. The same treatment applies to foreign legal entities that are at least 95% owned by such AIFs and operate exclusively to hold assets or invest capital for the benefit of the fund.
New tax framework for carried interest
Law 5313 introduces a dedicated tax regime for performance-based compensation, or carried interest, in the investment sector.
Income arising from “additional return” (carried interest) paid to employees of Greek companies providing services to EU AIFMs will be treated as capital gains from the transfer of capital.
A preferential tax rate of 5% will apply where the recipient transfers their tax residence to Greece and the Greek employer incurs annual domestic expenditure of at least EUR 3 million.
The law also allows Greek legal entities to deduct carried interest paid to employees as a business expense, provided an equivalent amount has been recognised in the entity’s business income.
Alternative taxation regimes updated
The legislation revises the procedures governing Greece’s alternative taxation regimes for individuals relocating to the country.
Eligible high-net-worth individuals under Article 5A will continue to pay a flat annual tax of EUR 100,000 on foreign-source income for up to 15 years, regardless of the amount of income earned. The law also extends certain administrative application deadlines until December.
For pensioners relocating from countries that have tax cooperation agreements with Greece, Article 5B continues to provide a flat 7% tax rate on total foreign-source income.
Individuals qualifying under the investor regime will also remain exempt from inheritance and gift taxes on movable property located outside Greece.
Housing, agriculture and VAT measures
The law introduces several additional tax measures affecting real estate, agriculture and public transport.
Income earned by legal entities from leasing residential properties under the “Build to Rent” programme will be exempt from income tax, provided the properties are committed to long-term leases of at least 10 years at predetermined rents.
A zero-rate excise tax will apply to diesel used exclusively for agricultural purposes from 2025. From 1 November 2026, a digital application will enable eligible farmers to purchase agricultural diesel without excise tax or the corresponding VAT being charged on the invoice.
The legislation also confirms that state grants received by the Thessaloniki Urban Transport Organization (OASTH) since July 2017 are exempt from VAT. Any VAT previously paid on those grants will be treated as unduly paid and may be recovered by the organisation.
Law 5313 forms part of Greece’s broader tax reforms, providing greater certainty on Permanent Establishment rules, refining the taxation of investment fund activities, updating relocation tax regimes, and introducing targeted incentives for housing development, agriculture and public transport.
