Greece’s new Law 5246/2025 offers super-deduction incentives for strategic sectors and revises income tax, VAT, and indirect tax rules, effective from 2025 and 2026 fiscal years.
Greece has passed Law 5246/2025, “Tax Reform for Demographics and the Middle Class – Support Measures for Society and the Economy”, following parliamentary approval on 7 November 2025.
The law introduces broad tax reforms, including incentives for strategic sectors, personal income tax changes, VAT adjustments, and measures to support small municipalities and border regions.
A key feature is a 100% super-deduction incentive for investments in defence, vehicle, and aircraft manufacturing, covering weapons, ammunition, military and motor vehicles, aircraft, and related machinery. Fast-track licensing accompanies the tax benefit. Details on eligibility, applications, audits, and restrictions will be set by a Joint Ministerial Decision. The regime applies to expenses incurred from 1 January 2026.
The law also revises income tax rules from the 2026 fiscal year. Employee and pensioner tax brackets are reduced by two percentage points, with a new 39% rate for income between EUR 40,000.01 and EUR 60,000. Incentives for electronic payments are extended until 2026, including deductions of 30% (up to EUR 5,000) for certain service expenses. New mothers are exempt from the minimum deemed income requirement from 2025.
Real estate taxation is updated with a progressive scale for rental income and extended exemptions on long-term leases of residences up to 120sqm. ENFIA reductions are expanded to small settlements outside Attica and selected border areas. Indirect tax changes include a 30% VAT reduction for certain islands and regions, an extension of the VAT suspension on new buildings, and the abolition of the television subscription duty.
