Turkey has it’s own regulations and procedures regarding the real estate trade in Turkey and there have recently been some changes to the law. Fethiye Times

Greece, Income Taxes and Tax Laws for Greek and non Greek Residents – 2014

Summary of key points:

On 23 July 2013, Law 4172/2013 was published in the Government Gazette replacing the Greek Income  Tax Code. The new provisions are  in principle applicable for income generated and expenses incurred for tax years starting as of 1st January 2014. The new provisions  aim is to significantly simplify and rationalize the  current tax system. They relate to individual  and corporate taxation, while more specific provisions regarding their  implementation will be included in the  Tax Procedures Code, a separate piece  of legislation is to follow. The new Income  Tax Code takes into consideration the  definitions and income characterisation deriving  from international tax law rules  and includes provisions relating to cross border transformations, as well as Controlled Foreign Companies (CFC) rules.

The main provisions are  summarized as follows:

Individuals  subject to income tax – foreign  tax credit
·  Individuals  having  their  tax residency in Greece are  subject to Greek income tax on their worldwide  income,whilst a foreign tax credit is provided on foreign income declared in accordance with the  OECD guidelines for the  avoidance of double  taxation.
·  Foreign individuals employed by local law 89/1967 offices are  subject to Greek income tax
only for their  Greek source income.
·  Individuals  having  their  tax residency outside Greece are  subject to Greek income tax on their  Greek source income earned during  a given fiscal year. The new law provides a detailed but indicative list of income sources deriving  in Greece. Foreign income is defined as any kind of income that is not classified under tax law as Greek source income.

Tax residency
The law introduces and clarifies the  definition of “tax residency” as follows:
·    Individuals: an individual  is classified as a tax resident of Greece provided that: a) he maintains in Greece his primary residence or habitual abode or the  centre of his vital interests or he is a consular or diplomatic employee or public servant working  under a similar regime or a public servant of Greek nationality working  abroad or b) is physically present in Greece for a period exceeding 183 days  during  a given 12-month period consecutively or sporadically for the  fiscal year, during  which the  above 12-month period is completed.
·   Legal persons and legal entities – a legal person or entity is considered to be a Greek tax resident in the  following cases:
a) they are incorporated or established under Greek law,
b) they have a registered office  in Greece or
c) the  place  of its effective management is in Greece at any time during  the  tax year. The “effective place  of management”concept should  be reviewed on an ad hoc basis  as per the  factual background of each case.
To this end,  indicative criteria are  listed (such as the  place  where the  annual General Meeting  of shareholders/ partners or the  Board of Directors takes place) without however excluding additional factors that although they  might not substantiate on their  own the  existence of tax residence in Greece, they  are  taken into account when determining the  place  of effective management (such as, the  residence of the  majority of shareholders or partners).

It is clarified that these provisions do not apply to companies subject to tax under Law 27/1975 and Legislative Decree 2687/1953.

Permanent Establishment (PE)
•  The concept of PE is defined in accordance with the  OECD guidelines.
•  A non-exhaustive list of examples, which may under certain conditions give rise to PE, is also provided for.
•  In any case, the  provisions of the  various Double Taxation Treaties (“DTTs”) override the provisions of domestic
law, which is applicable in absence of any DTTs.

Taxable  income categories
•  Taxable  income is determined as income deriving  after allowable deductions from the  gross income.
•  The following categories of taxable income are  defined:
•  Employment and pension income
•  Business income
•  Capital income
•  Capital gains
•  A different tax rate applies for each income category.

Tax year
•  The fiscal year  coincides with the  calendar year. Legal persons or entities keeping double- entry books  may set their  tax year  to end on June 30th or at any other date following the tax year  of their  shareholder, foreign legal person or entity, whose participation in the domestic legal person entity exceeds 50%.
•  The option of a tax year  exceeding 12 months not provided for.

Income’s acquisition time
•  Income’s acquisition time is considered to be the  time when the  right to collect  the  income is acquired.
•  Exceptionally, for uncollected accrued income from  employment and pensions that has been collected by the
beneficiary at a later tax year, the  time of acquisition of such  income shall be the  time of collection, to the extent that it is indicated separately in the  annual salary income statement granted to the  beneficiary.

Corporate  Income  Tax

Taxable and exempt legal persons & object  of tax
•  Taxable  persons are  limited liability companies and partnerships established in Greece or abroad, domestic or
foreign non-profit legal persons of public or private law, cooperatives and their  unions, civil law societies, civil
profit or non-profit companies, joint stock or undisclosed companies to the  extent they  exercise a trade or
business, consortia as well as legal entities.
•  There  is definition of tax exempt legal persons.
•  All income of taxable legal persons is considered as business income.
•  The corporate tax rate for legal persons and legal entities with double  entry accounting books  is 26%.

Thin capitalization rules
Thin capitalization rules  are  radically  amended:
•  The new rules  apply to all loans  irrespective of their  origin (intercompany or not, banking  etc).
•  The amount of redundant interest (interest on debt minus  interest income) is now taken into account for the  tax
deductibility of interest rather than the  equity and loans  of the  borrower as per the  previous regime.
•  The amount of net interest paid by a company is tax deductible up to 25% of the  earnings before interest, taxes,
depreciation and amortization (EBITDA) after tax adjustments; for companies that are  not part of a group, the net interest is tax deductible if it does  not exceed € 1.000.000 per year.
•  Subject to conditions, interest expenses can be carried forward in subsequent years.
•  Credit  institutions are  excluded from these provisions.
The new provisions apply for interest expenses realised in tax years beginning as of January 1st, 2014 onwards.

Inbound dividends received by a Greek tax resident legal  person
•  In the case of specific requirements that are not met (e.g. the  participation percentage is less than 10%), dividends are  taxed pursuant to the  general provisions, while the  tax that has been withheld is offset against the  corporate income tax liability.
•  The participation exemption on the  basis  of the  EU Parent – Sub Directive applies to inbound dividends received by a legal person from any subsidiary irrespective of whether it is established in Greece or in an EU member state or a third  country, except in a non – cooperative country.
•   If the  legal person receiving the  dividends does  not participate by at least 10% for 24 months, it could temporarily benefit from the  exemption, provided that the  latter submits to the  tax administration a guarantee equal  to the amount that should  have  been paid if the  exemption was not available. If the  24 month holding  period is not completed, the  guarantee may be forfeited, in any other case though, the  exemption is definitive and the  guarantee expires.
•  If the  distributed profits to the  parent company result from the  participation of the  subsidiary with another legal person, the  expenses relating to said participation are  not tax deductible.

The above provisions apply for dividends received as of January 1st, 2014 onwards.

Dividends distributed by a Greek tax resident legal  person
•  Dividends (and other relevant payments) distributed to a legal person included in the  EU Parent – Sub Directive’s
Annex, are  not subject to withholding provided that the  relevant requirements are  met.
•  If the  legal person distributes dividends to its parent company which has not completed the  24 month holding period of at least 10% participation but meets the  rest of the  requirements, the  distribution can be exempt of the withholding provided that the  legal person deposits a bank guarantee of an amount that is set based on a specific calculation.
•  The same applies for payments of interest or royalties between affiliated companies pursuant to EU Directive

Said provisions apply for payments realized as of January 1st, 2014 onwards.

Profits credited or remitted abroad from a branch in Greece
Pursuant to the  new provisions, it would appear that the  branch remittance tax is abolished.

Points regarding  mergers and spin-offs, transfers of assets for shares and exchanges of shares
EU Directive 2009/133/EC on the  common system of taxation applicable to mergers, spin-offs, transfers of assets and exchanges of shares concerning companies of different Member  States is transposed into the  Greek Income  Tax Code.
•  The aforementioned provisions apply to restructurings among Greek tax resident companies (no cross – border element), while it is not clear  whether prior domestic restructuring laws still apply (i.e. Law 2166/1993, Law 1297/1972 and article 16 of Law 2515/1997).

Additional provisions are  introduced compared to the  current regime; in particular:
•  The foreign shareholder of the  transferring entity, who exchanges securities of the  latter for securities in the receiving entity, appears to be exempt from tax on the  capital gains  due to the  merger or spin-off, as long as he holds both  securities through a permanent establishment in Greece. The same applies in the case of a share exchange.
•  The receiving entity is entitled to carry forward the  losses of previous years of the  transferring entity, subject to the  same conditions that would have  applied  to the  latter if the  merger or spin-off  had not taken place. In addition, in case of transfer of the  registered office  of a European Company (SE) or European Cooperative Society (SCE), the  permanent establishment that is created in Greece is entitled to carry forward the  losses of previous years of the  company that transferred its office.
The above provisions apply to restructurings realised as of January 1st, 2014 onwards.

Deduction of business expenses
Deduction of expenses is in principle allowed  under the  following conditions, with the  exception of certain expenses, which as per legal provision, are  explicitly not considered as deductible for tax purposes:
•  They are  made to the  interest of the  business or in the  ordinary course of its business transactions.
•  They correspond to an actual transaction, whose value  is not considered less or more than the  actual one,  based on indirect audit  methods (crosschecks).
•  They are  recorded in the  accounting books  of the  period in which they  incur and are  duly supported by proper documentation.

These provisions apply for expenses related to tax years ending after 30.6.2014 .

•  Depreciations performed from the  owner of fixed assets and from the  lessee, in case of a  financial leasing  agreement are  considered as tax deductible items, whereas the  concept of “financial leasing” is significantly widened for the  purposes of this provision.
•  Depreciation is performed by applying a specific depreciation rate on the  acquisition or construction cost per asset class  of a business.
•  The depreciation of each fixed asset begins the  month following the  one in which the  asset is used  or being  put into service by the  taxpayer.

The relevant provision is effective for tax years ending from 1.1.2014 onwards.

Valuation of inventory and semi-finished products
A time limitation of a minimum four years, as of the  tax year  of first use,  is introduced in the case of a change of the method chosen by a business for valuation of its inventory and semi-finished products.

The relevant provision is effective for fiscal years ending from 1.1.2014 onwards.

Bad debts
•  Bad debt provisions and write-offs are  deductible for income tax purposes at a rate defined on a case-by-case
basis, according to the  period of time that the  relevant claim remains uncollectible and the  amount thereof.
•  Restrictions are  introduced as regards formation of bad debt provisions for business’ shareholder or partner holding  at least a 10% participation and for business’ subsidiaries with a minimum  10% participation; in addition, special rules  for the  deduction of bad debt provisions are  introduced for banks, leasing and factoring companies.

The aforementioned rules  apply to provisions formed in tax years beginning on 1.1.2014 onwards. The provisions of Law 2238/1994 apply for provisions of bad debts that have  been formed in the  tax years 2010 – 2013.

Tax losses carry forward
•  Tax losses may be carried forward to be offset against business profits for five consecutive tax years from the  tax year, in which they were incurred. A new rule is introduced, under which the  right to carry forward tax losses ceases to apply,  in the case of changes in ownership or voting  rights exceeding 33% of their  value  or number, unless it may be proved that the  transfer has not taken place  for the  purpose of tax avoidance or tax evasion.
•  Offsetting of losses incurred abroad against business profits derived domestically is not allowed, with the  excep- tion of income arising  in other European Union or European Economic  Area Member  States, which is not exempt based on the  applicable Double Tax Treaty concluded and implemented in Greece.
•  The rules  governing the  deduction of losses (debit balance) resulting from the  exchange of Greek government bonds under the  PSI remain unchanged.

Indirect  method of profits’ determination
Business income is determined based on indirect audit  methods in the case of certain infringements making  audit verifications impossible or when the  accounting books  as well as other supporting documentation are  not main- tained or disclosed for inspection after two requests from the  tax authorities.

Intercompany transactions
•  The new law defines the  term “associated person”, which extends to legal persons, individuals and any other body of persons. The term encompasses two persons whereby:
i) the  one of them holds directly or indirectly shares, parts or quotas in the  other of at least 33%, estimated on the  basis  of total value  or number, or equivalent profit participation rights or voting  rights,
ii) another person participates directly or indirectly in them in any of the aforementioned ways,  or
iii) there is between them, direct or indirect management dependence or control or the possibility for the  one person to exercise decisive influence to the  other or of a third  person to do so in both  of them.
•  The old provisions, regarding the  documentation of intercompany transactions have  been replaced in the  new Code by a mere reference to the  arm’s length rule governing transactions between associated persons. The procedure for the  documentation of such  transactions will be included in the  Tax Procedures Code.
•  Furthermore, the  concept of “business restructurings” is introduced. Specifically, a business restructuring must be effected in accordance with the  arm’s length principle. It is stated that in the  case of an intercompany business restructuring, either local or cross-border, in which there is transferred goodwill or intangible assets or assigned their  use,  then such  transfer should  be performed at a price  which shall be in compliance with the  arm’s length principle. Moreover, the  reallocation of risks and functions in the  context of this restructuring should  be performed in accordance with the  arm’s length principle by taking into account other comparable cases.

Preparation of the  transfer pricing documentation file and submission of the  summary information table
With regards to the  fiscal year  ending 31.12.2012 the  transfer pricing  documentation file must be prepared and the summary information table should  be submitted until August 16,  2013.

Non-cooperative countries and countries with a preferential tax regime
The provisions relating to the  disallowance of business expenses paid to suppliers’ tax resident in non-cooperative or countries with a preferential tax regime remain in force.

Controlled  Foreign  Companies (CFC)
CFC rules  are  introduced for the  first time in the  Greek tax legislation with the  aim to deal with tax avoidance of Greek companies through shifting revenues to subsidiaries in low tax jurisdictions. Basically,  these rules  provide for the  inclusion  in the  taxable income of the  Greek companies of undistributed “passive” income (e.g. interest, dividends, royalties etc.) of foreign subsidiaries under the  conditions stipulated in the  law.

Taxation of reserves
•  Non-distributed or non-capitalised reserves of companies as depicted in their  last balance sheet before 1.1.2014 deriving  from profits that have  not been subject to taxation according to an exemption as per Law 2238/1994 or circulars or decisions issued under this law, in case of distribution or capitalization until 31st December 2013 are subject to tax at 15% exhausting the  respective obligation of the  company, as well as its shareholders or partners.
•  Effective 1st January 2014, the  above reserves are  obligatorily set-off at the  end of each tax year  with losses of whichever nature of the  last 5 years until exhaustion, unless they  are  distributed or capitalised in which case they are  subject to taxation at 19% exhausting the  tax liability of the  company, as well as of its shareholders or partners
•  Effective 1st January 2015, it is not allowed  to maintain special tax-free reserve accounts.

Income  tax for individuals

Salary  income and pension income
•  The new law introduces a definition for salary and pension income according to which oral agreements for the provision of employment services are  recognized for tax purposes as employment contracts by means of which the individual  – employee earns taxable salary income.
•  The new law attempts to introduce a general rule about the  requirement to include  in the  employee’s taxable income (as a salary payment in kind) benefits in kind paid to the  respective employee or to their  relatives. In particular, the  market value  of benefits in kind received by an employee is included in his taxable salary income, provided that their  total value  exceeds EUR 300 per year.
•  Salary  in kind contains the  following indicative examples:
•  30% of the  expenses recorded in the  employer’s accounting books  incurred for the  granting of a company car to employees, are  considered as taxable salary income of the  employee having  the  right to use such company car for any period during  a fiscal year.
•  benefits in kind granted in the  form of a loan provided to an employee or shareholder or partner in a partnership (prepayments of salaries exceeding the  amount of 3 monthly salaries are  considered to be a loan granted by the  employer to the  employee).
•  rental payments for the  employee or 3% of the  objective value  of a company owned  home  that is made available by the  employer to the  employee for housing purposes.
•  Insurance premiums paid on behalf  of the  employee in the  course of group insurance policies  are  exempt from the calculation of total taxable salary income.
•  Accumulated capital reflecting insurance premiums of the  employee paid until 31.12.2013 is exempt from the
final withholding income tax imposed on insurance indemnities, which are  withheld by an insurance company in the course of group insurance policies  (private pension schemes).
•  Meal coupons of a value  up to EUR 6 per workday are  not considered as taxable salary income.
•  Unemployment benefits paid by OAED to unemployed individuals are  exempt from income tax, provided that the other income of the  taxpayer does  not exceed the  EUR 10,000 threshold annually.
•  The currently applicable provision according to which withholding tax on salary income and pension income is reduced by 1.5% remains in force.

Taxable  income from salaries or pensions is subject to income tax according to the  following tax scale:

Taxable income  (EUR)     Tax rate (%)
≤25.000                                     22%
25.000,01 up to 42.000              32%
› 42.000                                     42%

Alternative ways to assess minimum income tax payable (“deemed income tax provisions”)
Under  the  new provisions the  difference between deemed income and total actual income is subject to income tax:
a) according to the  tax, progressive scale  applicable for salaried employees, provided that the  taxpayer earns exclusively or mainly salary income and or pension income or
b) according to the  tax progressive scale  applicable for business income, provided that the  taxpayer earns exclusively or mainly business income.
•  In case of a difference between deemed income and real income of the  taxpayer, losses of the  respective fiscal year or of previous fiscal years are  not deducted from taxable income and cannot be carried forward for offsetting purposes.
•  The following are  classified as deemed income under the  provisions of the  new law: acquisition of a single proprietorship or unlimited liability partnership or limited liability partnership or corporation or limited liability company or private corporation or society of civil law or joint venture, or purchase of company parts or securities.
•  It is confirmed that the  deemed income provisions are  not applicable in the  case of a foreign tax resident who does not earn income from Greek sources.
•  Finally, it is clarified that the  deemed income tax provisions of the  new law are  not applicable in the  case of individuals who are  representatives of foreign diplomatic missions or individuals employed by institutional organi- sations of the  European Union or International Organizations who have  been stationed in Greece according to an international treaty.
•  The provisions of article 10 of law 2019/1992 with regard to expenses made as of 1.1.1994 are  not applicable to cover the  difference between actual income and deemed income. Funds  that have  been taken into account for the purposes of covering the  difference between real income and deemed income, are  deducted from the  capital that is accumulated from earlier years.

Business profit
•  Business profit is defined as the  total revenues from business transactions after deduction of business expenses,
depreciation and bad debt provisions taxed according to the  following scale:

Taxable income  (€)              Rate (%)
≤ 50.000                                     26%
› 50.000                                      33%

•  Any fortune increase deriving  from an illegal, unjustified or unknown source or cause is considered as business profit subject to tax at 33%.

Income  from capital
Income  from capital received either in cash  or in kind, is introduced as a distinct income category for individuals and includes:
•  Dividends,  subject to withholding tax at the  rate of 10%, exhausting any further tax liability for individuals. The tax is withheld by the  person paying  the  dividends. The concept of dividends is extended in accordance with the  OECD guidelines and includes all distributable profits irrespective of the  legal form of the  distributing entity.
•  Interest, subject to withholding tax at the  rate of 15%, exhausting any further tax liability for individuals. The tax is withheld by the  person paying  the  interest. Interest deriving  from Greek State’s bond loans  and Treasury Bills acquired by individuals and interest deriving  from bonds issued by the  European Financial  Stability Facility within the context of PSI are  exempt.
•  Royalties, subject to withholding tax at the  rate of 20%, exhausting any further tax liability for individuals. The tax is withheld by the  person paying  the  royalties.
•  Income from immovable  property, subject to tax as per the  following tax scale:

Rents (euro)                     Rate (%)

≤12.000                               11%

›12.000                                33%

The term income from immovable property has the  meaning of income in cash  or in kind, deriving  from the  leasing or self-use or the  free  of charge grant of use of real estate.

Income  in kind is computed at market value  whereas imputed income from self-use or free  of charge grant of use is computed at 3% of the  objective value  of the  real estate. The free  of charge grant of residence with surface up to 200 sq.m. to ascendants or descendants, for the  purpose of being  used  as a primary residence, is exempt.

The above apply for income acquired in fiscal years commencing as of 1.1.2014; the  tax withholding obligation
applies for payments to be made from 1.1.2014 onwards.

Income  from capital gains
Capital gain deriving  from transfer of capital is taxed at the  rate of 15% and refers to:
•  Capital gains  from the  transfer against consideration of real estate or part thereof or encumbrance on real estate or part thereof or holding  attracting more than 50% of its value  directly or indirectly from real estate.
•  Capital gains  from the  transfer of securities provided that such  transfers are  not classified as business
activities. The above does  not apply to capital gains  arising  from corporate restructuring / transformations.
•  The new provisions apply to capital gains  from transfers of real estate and transfers of securities taking place  from 1.1.2014 onwards. In the  meantime, the  5% tax on the  real transfer value  of non-listed shares of domestic or foreign corporations acquired until 31 December 2013, still applies. The 20% taxation of capital gains  from trans- fer of shares listed on the  Athens Stock Exchange and acquired from 01.07.2013 onwards, is abolished.
•  Capital gains  tax from the  transfer of real estate is withheld by the  Notary Public, whereas an exemption applies for capital gains  up to Euro 25,000, provided that the  respective property has been retained for at least five years and no other transfer of real estate has been effected within the  retention period.
•  The exemption of capital gains  arising  from the  exchange of Greek State Bonds or corporate bonds guaranteed by the  Greek State with other securities in the  context of PSI remains in force.
•  Loss deriving  from the  transfer of real estate and transfer of securities can be carried forward indefinitely, whereas such  loss can only be set off against profits deriving  from transfer of real estate and transfer of securities, respectively.

The above categories of income are  included in income from business activity of legal persons and legal entities and are  taxed according to the  relevant rates.

Special provisions regarding  capital gains  from the  transfer of real estate
•  Transfer of real estate has the  meaning of transfer of ownership or bare ownership, of usufruct’s constitution, habitation or other easement’s constitution, waiver  of ownership or of other rights on real estate, expropriation of real estate, the  sale of real estate as a result of voluntary or judicial auction, the  transfer of a right related to building coefficient ratio. The law recognizes limited exceptions to the  concept of transfer.
•  Capital gain has the  meaning of the  difference between the  acquisition price  paid by the  taxpayer and the  deflated transfer price  paid to him. The acquisition price  is considered to be the  price  as stated in the  notarial deed or the actual purchase price  as evidenced or, in absence thereof, the  value  upon  which the  real estate transfer tax was calculated. In case that the  acquisition price  cannot be calculated, it is considered as nil. The transfer price  is considered to be the  consideration as stated in the  notarial deed.

The :
i) capital gain from a building constructed with expenses of the  lessee and
ii) capital gain from bare ownership of real estate are  determined in a special manner.
The resulting capital gains  are  adjusted by applying an age  coefficient determined as follows:

Years of retention                        Age coefficient
From 1 to 5                                       0,95
More than 5   and up to 10               0,87
More than 10 and up to 15               0,79
More than 15 and up to 20               0,73
More than 20 and up to 25               0,66
More than 25                                    0,61

Special provisions regarding  capital gains  from the  transfer of securities
•  Capital gains  deriving  from the  transfer of securities include:
i) the  transfer of the  business as a going concern,
ii) shares in listed or non-listed companies,
iii) parts in partnerships,
iv) Greek State and corporate bonds, Greek Treasury Bills and
v) derivatives of financial instruments which are  listed indicatively.
•  Capital gain has the  meaning of the  difference between the  acquisition price  paid and the  transfer price  received, including  any expenses directly connected with the  acquisition and sale of securities which are  not added or deducted, respectively. As per listed shares, their  acquisition and transfer price  derive from documentation issued by the  intermediary broker or bank or documentation notified to Hellenic Exchanges S.A. As per non-listed shares, the  transfer price  is the  higher price  between the  contractual price  and the  net equity (upon transfer) of the company that issues the  shares. The purchase price  is the  lower price  between the  contractual price  and the  net equity (upon transfer) of the  company that issues the  shares. In the case that the  acquisition price  cannot be calculated, it is considered as nil.

Submission of tax returns
•  Income  tax returns are  filed in the  period from 1st February to 30 June of the  year  following the  tax year  to which they  relate.
•  As a rule,  individuals file their  returns through electronic means, while hard  copy submission is allowed  in exceptional  situations.
•  A decision of the  Minister of Finance will further regulate the  manner, timing,  format and content of the  income tax returns, as well as the  documents and other information to accompany the  submission.

Income  tax prepayment
•  For individuals, an amount of 55% of the  tax due is assessed against the  tax corresponding to the  revenues from business activities of the  current year.
•  No tax prepayment is assessed in case the  amount to be assessed does  not exceed € 30 or the  tax return includes only income from salaries and pensions, as well as residence self-occupation.
•  Special  provisions apply with respect to architects, engineers and lawyers.
•  For legal persons and entities, the  tax prepayment equals to 80% of the  tax corresponding to the  revenues of the tax year  for which the  return is filed. For domestic as well as foreign banks  operating in Greece through branches, the  tax prepayment is 100%, while for partnerships, non-profit legal persons of public or private law as well as joint ventures of partnerships the  tax prepayment is 55%.
There  are  certain cases where a tax prepayment is not assessed on companies transformed or merged under the  provisions of L.D. 1297/1972, L. 2166/1993, L.2190/1920 or L. 3190/1955 or special rules, as well as for distributed or capitalised profits of corporations exempt from taxation according to special law provisions.

Luxury tax
The provisions for the  application of luxury tax on the  deemed income value  of cars, airplanes, helicopters, gliders and swimming  pools take effect for revenues declared on tax returns of fiscal year  2013 onwards, as opposed to the original  entry into effect envisaged as of fiscal year  2014 according to article 44 of L. 4111/2013.

Tax assessment
•  The option to pay taxes in installments is now abolished in case of finalization of the  tax assessment due to non filing or late  filing of an appeal, or settlement agreement with the  tax authorities or administrative court decision and the  tax due is paid in an lump sum until the  last business day for the  public sector of the  month following the one when the  assessment or signature of the  settlement agreement took place.
•  In case of a settlement agreement with the  tax authorities or provisional tax audit, it is necessary to pay 1/5 of the assessed taxes, duties and charges upon  acceptance of the  settlement.
•  The above provisions apply as of 1.8.2013 and relate to assessments and decisions issued after of 1.8.2013.

Penalty reduction
•  Penalties under articles 4, 5 and 6 of L. 2523/1997, in the case of an administrative or court settlement are  reduced to 1/3 or 1/2 depending on the  case, provided that 20% or 30% thereof is paid immediately while the  residual amount is assessed in a lumpsum until the  last business day for the  public sector of the  same or the  following month from when the  administrative or court settlement takes place.
•  This provision applies for penalty assessments issued as of the publication of the  Law, i.e. 23 July  2013.

Reduction of VAT on restaurant services
From 1.8.2013, VAT on restaurant services is reduced to 13%.

Other provisions
•  The provisions of L. 2778/1999 regarding the  taxation of real estate investment companies remain in force.
•  The provisions of L. 3371/2005 and L. 2992/2002 regarding the  taxation of venture capital companies as well as venture capital funds  remain in force.
•  The provisions regarding the  taxation of shipping businesses as well as related individuals for their  income deriving  there from remain in force.

Nickolas C. Papanikolaou