Enhanced tax incentives for businesses, including super deductions, discounts for green and digital investments, and special preferential regimes for acquisitions and mergers have significantly expanded the list of tax breaks, substantially increasing costs for the public sector.
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Based on budget data in the special report on tax expenditures for 2025, the list of tax exemptions added 120 new cases, reaching a total of 1,236 compared to 1,116 last year, while costs increased by €4 billion to €22.8 billion from €18.82 billion. The largest share goes to capital taxation exemptions (property transfer tax, inheritance tax, parental gifts, donations, inheritances, property tax) which reached €9.069 billion, with the amount reduced by €428 million.
Following for the first time are corporate income tax deductions, with a fiscal cost of €5.805 billion compared to €1.268 billion in 2024, as the number of companies benefiting from related regulations increased to 12,703 from 7,534 last year. Meanwhile, nearly seven million individuals avoided taxes worth €4.9 billion through tax exemptions, while VAT exemptions and deductions on special consumption taxes exceeded one billion euros.
The tax exemption breakdown
The detailed breakdown of tax exemptions is as follows:
- Personal income tax: 252 cases are recorded with a cost of €4.946 billion, of which €3.950 billion concerns tax-free thresholds and deductions for 7,076,526 taxpayers and €923 million covers deductions and exemptions for seafarers, allowances, extraordinary compensation, benefits, subsidies and interventions related to deemed income and protection of vulnerable groups. Tax reductions for families with children reach €3.92 billion and affect more than 6.7 million taxpayers.
- Corporate income tax: 265 tax exemptions are recorded, a number almost as high as for individuals. The total cost of corporate tax exemptions amounts to €5.805 billion, exceeding the corresponding cost for individuals. Exemptions for dividend income or profits from participation in legal entities amount to €1.157 billion, up from €645.943 million in 2024.
- Capital taxation: Nearly 5 million taxpayers avoided taxes worth €9.069 billion, down from €9.497 billion in 2024. Tax exemptions cover property transfer tax (cost €6.3 billion), real estate transfer tax (€2.426 billion), property tax (€93.6 million), inheritances (€138.7 million), gifts, parental provisions and gambling winnings (€61.6 million).
- VAT: 73 tax exemptions apply, covering education services, financial services, cultural activities, tax reductions in Aegean islands and reduced rates on essential goods and services in tourism and hospitality sectors, costing €1.007 billion.
- Special consumption taxes: 42 exemptions exist with a total cost of €1.024 billion, mainly on energy products and alcoholic beverages. This category is particularly critical as special consumption taxes are inherently socially and fiscally sensitive taxes.
- Vehicle registration fees: Costs amount to €247.5 million, while there are 30 exemptions on circulation fees costing €24.4 million. The cost of insurance premium tax exemptions reaches €622.6 million.
- Capital concentration tax: 19 exemptions are identified costing €17.226 million, while luxury tax exemptions are limited to just 4 cases with extremely low fiscal cost of only €200,000.
- Digital transaction fee: Replaced the stamp duty with a cost of €72.88 million.
