The tax bill titled “Measures for the Enhancement of Income, Tax Incentives for Innovation and Business Transformations, and Other Provisions” was submitted to Parliament yesterday, including additional positive provisions.

Key Additional Provisions

• Extension of VAT Suspension: The VAT suspension for new buildings is extended until 31.12.2025.
• Permanent ENFIA Exemption: Listed buildings valued up to €400,000 are permanently exempt from ENFIA property tax.
• Salary Adjustments: Wages for students of the Armed Forces Academies will be increased to match those of students in Security Forces Academies.
• Income Tax Exemption on Debt Write-Offs: Businesses and self-employed individuals will be exempt from paying income tax on debts partially or fully written off under out-of-court settlements. This provision, reinstating a measure valid until late 2020, applies to income tax due from 1.1.2024 onwards, aiming to support financial recovery.
• Debt Arrangement Revival for Joint Liability: Individuals jointly liable for debts of legal entities can revive lapsed arrangements, allowing them to repay under the same terms as the legal entity.

Broader Provisions

The bill includes 12 tax reductions and measures aimed at increasing citizens’ income while modernizing tax legislation and improving the efficiency of the Independent Public Revenue Authority (AADE). Key initiatives include:

• Business Mergers and Innovation: Incentives to encourage mergers, acquisitions, and innovation while strengthening start-ups.
• Research and Development Incentives: Expanded tax incentives for scientific and technological research, along with updated limits for deductible expenses related to business development and innovation.
• Tax-Free Tips: Tips of up to €300 per month are exempt from tax and insurance contributions.
• Climate Resilience: Measures to enhance the Greek economy’s resilience against the impacts of climate change.

Supplementary 2024 Budget

The bill also introduces a €400 million supplementary budget to fund critical infrastructure and ongoing projects. Key allocations:

• €100 million increase in the Public Investment Budget (national segment) to meet expenses stemming from the rapid implementation of the National Development Program (NDP), especially at the regional level.
• €300 million for the co-financed segment to settle payments for projects from the 2014–2020 NSRF programming period.
• A) 12 Tax Reductions in 2025
  The bill includes measures announced by the Prime Minister at the Thessaloniki International Fair (ΔΕΘ), specifically detailing the following interventions:
  Reduction of Social Security Contributions: An additional reduction of 1 percentage point, building on the 4.4 percentage points reduction implemented by the current government. This benefits both employers (via lower non-salary costs) and employees (via increased net earnings).
  Abolishment of the Professional Tax Levy: For all individuals, including self-employed professionals and those compensated through invoicing arrangements (“μπλοκάκι”).
  3-Year Income Tax Exemption for Certain Rental Properties:
  Applies to residential properties up to 120 sq.m. that were previously declared as vacant or used exclusively for short-term rentals, provided they are leased under contracts lasting at least three years between September 8, 2024, and December 31, 2025.
  Exemption from Health Insurance Premium Tax (15%): For health policies covering children under 18. In family or group policies, the tax reduction is proportional to the number of minors covered.
  Double ENFIA Reduction for Insured Properties: From 10% to 20% for insured residential properties with a taxable value up to €500,000, provided insurance coverage for natural disasters (e.g., fires, earthquakes) is valid for at least three months in the prior year.
  Abolishment of Fixed Telephony Fee (5%): For optical fiber connections (≥100 Mbps).
  Tax Exemptions for Employer Contributions to New Parents:
  Allowances up to €5,000 per child, paid within 12 months after childbirth.
  Annual employer contributions up to €5,000 for nursery or daycare expenses.
  Preferential Tax Rate for Doctors’ On-Call Pay: Set at 22%, offering an average monthly net gain of €150 to €200.
  Incentives for Small Business Mergers and Acquisitions: With a budget of €40 million.
  Stamp Duty Reductions: Already legislated for 2025, covering transactions like corporate loan interest and building permits, costing €30 million in total.
  Fuel Excise Refund for Agricultural Diesel: Recently legislated as a permanent measure, costing €100 million annually.
  Extension of VAT Suspension for New Buildings: Until December 31, 2025, aiming to boost real estate activity and attract investments.
  Additional Measures:
  Extension of capital gains tax suspension on property transfers until December 31, 2026.
  A 50% reduction in minimum taxable income for self-employed professionals residing in communities with fewer than 1,500 inhabitants.
  Permanent ENFIA exemption for listed buildings worth up to €400,000 to support owners with high maintenance costs.
  
  B) Measures to Boost Citizens’ Incomes
  Based on announcements at the ΔΕΘ, the following are implemented:
  Special Financial Aid for Pensioners: Granted by December 31, 2024, for those with a personal pension difference exceeding €10:
  €200 for pensions up to €700.
  €150 for pensions between €700.01 and €1,100.
  €100 for pensions between €1,100.01 and €1,600.
  €200 Aid for Vulnerable Groups by December 31:
  Beneficiaries include disability pension recipients, uninsured elderly, and others under specific programs.
  One additional payment for child allowance beneficiaries.
  An extra 50% payment of the guaranteed minimum income.
  Other Adjustments:
  20% increase in night shift pay for uniformed personnel starting January 1, 2025.
  Salary revisions for Armed Forces students from January 1, 2025.
  Financial incentives tied to achieving fiscal targets for Greek Statistical Authority personnel.
  
  C) Clear Tax Deadlines, Discounts for Compliance, and Penalties for Delays
  New measures set a strict timeline for tax return submissions:
  Submission from March 15 to July 15 annually.
  Discounts of 4%, 3%, or 2% for early payment, depending on submission date.
  Tax payable in eight monthly installments starting July 31.
  Penalties for delays include fines for public sector officials responsible for data submission and organizations failing to comply with reporting requirements.
  
  D) Business Incentives for Mergers, Acquisitions, Research, and Startups
  Provisions include:
  Unified frameworks for domestic and cross-border business transformations.
  Reduction of the minimum capital requirement for tax incentives in small business mergers.
  Transfer of tax losses during business transformations.
  Special residence permits for investors contributing at least €250,000 to startups, conditional on job creation.

1. Incentives for R&D spending: Tax deductions for R&D expenses are increased from 200% to 250%-315% for collaborations with startups, research centers, or knowledge-intensive SMEs. Patent commercialization incentives extend with a 10% income tax reduction for seven years after the initial 3-year tax exemption.
2. Investors: The tax-deductible investment limit in startups increases from €300,000 to €900,000, covering up to 50% of contributed capital.
3. Dividend and capital gains tax exemption: Income from foreign subsidiaries (outside the EU) is tax-exempt, including capital gains from equity transfers.
4. New tax regime for investment funds: Simplified taxation encourages local venture capital formation.
5. Independent Authority for Public Revenue (AADE): Management is restructured for faster and more efficient operations, with new deputy roles and streamlined hiring.
6. Tax-free gratuities: Tips up to €300/month are tax-exempt and free of social security contributions, with measures to prevent wage substitution.
7. Climate resilience measures: Mandatory insurance for businesses earning over €500,000/year and vehicles for natural disaster coverage. A new “climate resilience fee” applies to tourist accommodations and cruises.
8. Short-term rentals in Athens restricted: Registrations banned in central districts for 2025; violations face fines.
9. ENFIA exemptions and housing loans: Tax relief for affected regions and expanded loan support for first homes and renovations.
10. Coastal management: Municipalities can manage beaches for development with specific revenue-sharing rules.