Summary

The Greek Ministry of National Economy and Finance has published a draft bill for public consultation, proposing a series of significant tax measures affecting both individuals and businesses.

The principal proposals include amendments to the special tax regime under Article 5C for individuals transferring their tax residence to Greece, the introduction of a dedicated tax framework for crypto-assets, and changes to the taxation of certain profit distributions made to members of Boards of Directors.

As the draft bill remains subject to public consultation and has not yet completed the legislative process, the measures summarised below are not final and may be revised before enactment.

The detail

The key proposals include:

• amendments to the Article 5C regime, particularly regarding the two-year residence requirement, the termination of qualifying employment and the subsequent transfer of tax residence outside Greece;
• the introduction of a 10% tax on capital gains arising from crypto-assets, subject to an annual net-gain exemption threshold of €500; and
• an increase from 5% to 15% in the tax rate applicable to certain profit distributions to Board members, to the extent that such distributions exceed €60,000.

Proposed amendments to the Article 5C special tax regime

• Two-year residence requirement: If an individual does not satisfy the requirement to remain in Greece for at least two years, the Article 5C regime would be withdrawn retrospectively from the first year of application. Consequently, the 50% income tax exemption would cease to apply from that first year.
• Termination of qualifying employment: Where the relevant employment condition is no longer satisfied, eligibility for the regime would cease from the effective date on which the employment relationship terminates, rather than for the entire tax year.
• Transfer of tax residence abroad: Where the employment condition ceases to be met and the individual also transfers their tax residence abroad, the regime would cease to apply from the tax year in which the tax residence is transferred abroad.

Proposed tax framework for crypto-assets 

• Capital gains realised by individuals on the disposal of crypto-assets would be subject to tax at a rate of 10%. An exemption would apply where total annual net gains do not exceed €500.
• Crypto-asset losses exceeding €500 could be carried forward for five years and offset exclusively against future capital gains arising from crypto-assets.
• The acquisition of crypto-assets would be treated as expenditure for the acquisition of assets for Greek deemed-income purposes (“tekmiria”).
• A voluntary disclosure regime is proposed for historical disposals of crypto-assets. Subject to the applicable conditions, individuals would be permitted to declare prior gains within 12 months from the entry into force of the relevant provisions, without penalties or interest.
• Disposals of crypto-assets would be exempt from the Greek Digital Transaction Duty.
• Specific rules are proposed for crypto-assets acquired through inheritance, donation or parental gift, including rules governing their valuation for Greek tax purposes.

Proposed taxation of profit distributions to Board members

Profit distributions made by legal entities to members of their Boards of Directors would, to the extent that they exceed €60,000, be subject to tax at a rate of 15%, compared with the current rate of 5%.

Contact us

To discuss how the proposed measures may affect you or your organisation, please contact your usual Vialto Partners representative or, alternatively:

Lina Foka
Tax Director

Evangelia Nouskali
Tax Senior Manager