A new wave of tax interventions is set to enrich the business relief package that the Prime Minister will present from the podium of the Thessaloniki International Fair (TIF). On the table, beyond the reduction of the tax prepayment from 80% to 50–55% — with a fiscal cost estimated at €800 million and as a first step toward its gradual elimination over the next four years — as well as the abolition of the business levy, at a cost of €240 million, lies a comprehensive reform of the tax loss carryforward framework.
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This is a measure that has firmly entered the radar of the Ministry of National Economy and Finance, as it is expected to strengthen business competitiveness, boost investment, and align Greece with the practices applied in most European countries.
What makes this particular intervention stand out is that it does not fall into the category of classic tax cuts with an immediate fiscal cost. Instead, it is treated as a structural change to the tax system — one that can facilitate business operations, reduce tax risk, and support investment decisions, particularly in sectors where it takes many years before invested capital generates returns. According to sources, the economic team is examining scenarios for extending the tax loss carryforward period beyond the current five-year limit, with final decisions expected to be locked in within the coming days. The goal is to create a more business-friendly tax framework for companies with long-term investment plans, such as those in industry, energy, new technologies, construction, and other capital-intensive activities.
Tax loss carryforward: What the current rules mean for businesses
Under the existing regime, businesses in Greece can offset tax losses only against future profits, and only within a five-year window. If sufficient profitability is not achieved within that period, the right to utilize those losses is permanently forfeited. The scenario under consideration envisions extending this time limit or even adopting a more flexible system. The change is expected to particularly benefit new businesses, large investment projects, and sectors where the payback period on investments spans many years. In such cases, losses incurred in the early years often cannot be fully offset before the five-year period expires, leaving businesses with no tax benefit whatsoever.
Why tax loss carryforward reform matters for Greek businesses
The discussion carries even greater weight when viewed against the backdrop of corporate profitability in Greece. The latest available tax data show that more than half of all businesses continue to report losses or zero taxable income. Specifically, among incorporated companies, 66,737 out of 134,708 businesses (49.5%) declared losses, while a further 14,350 reported a zero result. Similarly, among partnerships, 51,912 out of 131,359 were loss-making, and another 8,574 declared zero profits. In total, nearly six in ten businesses either record losses or report no taxable income. This picture explains why a more flexible loss carryforward regime is considered a critical tool, especially for businesses in growth phases, those undertaking investments, or those heavily affected by economic fluctuations.
Loss carryforward provisions are a cornerstone of tax policy in most developed economies, as they allow businesses to smooth out their tax burden over time. This way, companies are taxed based on the overall cycle of their activity, rather than solely on the results of a single financial year.
How Europe handles tax loss carryforward: A comparative look
Of the 35 European countries examined in relevant international studies, 19 allow tax losses to be carried forward for an unlimited number of years. The remaining countries apply specific time limits. Luxembourg offers the most generous regime among those with restrictions, allowing carryforward for up to 17 years. Greece, by contrast, falls into the group applying the strictest five-year limit, alongside Bulgaria, Croatia, the Czech Republic, Hungary, Moldova, Poland, Romania, Slovakia, and Slovenia. This is widely considered a disadvantage for long-term investments, as in many cases the payback period significantly exceeds five years. The Greek system is also more restrictive when it comes to the possibility of carrying losses back to prior years.
In several countries, businesses can offset current-year losses against profits from previous years, even receiving a refund of taxes already paid. This mechanism acts as a liquidity support tool during periods of recession or intense economic uncertainty.
Greece does not provide for such a mechanism, while only nine European countries currently apply this system. Estonia and Latvia are the only ones that place no time limit on it. At the same time, several European governments are revisiting their rules in this area. Cyprus decided this year to extend the maximum carryforward period from five to seven years, enhancing its attractiveness as an investment destination. Slovenia, on the other hand, restricted its carryforward from unlimited duration to five years as of 2025. France tightened its framework this year for companies with very large accumulated losses, capping the ability to utilize them for amounts exceeding €2.5 billion. Meanwhile, Switzerland will increase its carryforward period from seven to ten years starting in 2028, while Germany is set to re-impose restrictions on the deductibility rate for large losses — unless the current regime is extended.
Originally published in Apogeumatini tis Kyriakis
