After individuals, the baton of tax relief passes to businesses, with the government preparing a new package of measures with a horizon until 2027. At the center of the planning are interventions aimed at reducing tax burdens and improving liquidity, in an effort to address the market’s ongoing demands.
Prime Minister Kyriakos Mitsotakis left open the possibility of reducing advance tax payments, a measure considered “key” to strengthening business liquidity. At the same time, on the table are the abolition of professional fees, increasing the seizure-proof limit on business accounts, as well as changes to the tax framework for intra-group transactions.
What is being examined regarding tax relief
Specifically, the following will be put under the microscope in the coming period:
1. Reduction of advance tax payments: The reduction of advance tax payments is expected to give businesses “breathing room,” as today they are required to prepay up to 80% of the tax corresponding to the next fiscal year. The measure would allow small and large companies to retain more capital to cover basic operational needs, thus limiting the risk of increased business closures in the market. Despite the high fiscal cost, it is estimated that cutting advance tax payments will have a positive impact on growth and public revenues in the medium term.
2. Reform of taxation in business groups: On the table is a plan for changes in the taxation of business groups that will focus on transactions between subsidiaries and the parent company. In fact, the economic team is proceeding with commissioning a specialized study from a private company, whose conclusions will form the “raw material” for shaping upcoming legislative interventions. According to the relevant decision, the goal is to fully “map” the taxation systems of large business structures in other European and international economies, analyze the pricing method of intra-group transactions, and present solutions adapted to the needs of the Greek market. The initiative is part of the government’s broader planning for harmonization with OECD and EU standards, as well as for enhancing the country’s competitiveness as an investment destination.
As competent sources note, “Greece must have a framework absolutely compatible with EU best practices, in order to provide predictability to businesses and limit ‘gray areas’ in intra-group transactions.” In this context, the General Secretariat of Tax Policy closely monitors developments so that the Greek system does not lag behind the most advanced European models. The study will attempt to answer two critical questions: how are intra-group transactions currently carried out and documented, and what group taxation model can Greece adopt to make the business environment simultaneously fairer, more transparent, and more competitive. As the same sources clarify, intra-group transactions do not only concern large groups or companies, but all businesses that are connected to each other, such as small companies that have a common partner or common shareholder with a significant percentage, common management, etc. Thus, a company can buy, sell, lend, provide services, or transfer rights to another company belonging to the same group, so this act is an intra-group transaction. Greece does not yet have a general intra-group taxation regime. With the new system, groups will be able to balance losses and profits within the group, reducing business risk and enhancing their investment capacity, without necessarily needing mergers.
3. Abolition of professional fees: The abolition of professional fees is a standing demand of the business community, as it is considered an anti-developmental tax. The fee is imposed annually on all businesses, regardless of profitability, and particularly burdens small and medium-sized companies. Its abolition would reduce operating costs, enhance competitiveness, and send a message of support for entrepreneurship, making the Greek environment more attractive for investments.
4. Seizure-proof business account: The Ministry of Finance and AADE are planning to end “locked” bank accounts for compliant tax debtors. Based on the voted regulation of 2019, the seizure-proof limit of €1,250 is increased with specific coefficients depending on the number and amount of installments that professional debtors will pay off. The amount of the bank account that the tax office cannot “touch” will increase provided the debtor has regulated their debts and has paid two installments, has declared the account for which they request exemption from seizures, and pays installments on time.
