New Priority Framework for the granting of the Final Connection Offers

Pursuant to the provisions of Decision No. YΠΕΝ/ΓΔE/84014/7123/12-8-2022 of the Minister of Energy (Government Gazette 4333 B΄/12-8-2022) the priority framework for the granting of the Final Connection Offers (F.C.O) for RES plants, CHP plants and energy storage plants was established in order to be applied by the Network Operator and the System Operator. The priority in the granting of F.C.O. is realised through the grouping of the plants into six main ranking groups, including sub-groups, with respect to the System Operator and five ranking groups with respect to the Network Operator. Some of the main criteria for the application of the new priority framework are the technology of the projects, their capacity and their geographical location, while special terms and conditions are introduced for the inclusion in some of the priority groups, namely the application of a maximum power limit for connection offers per priority group/subgroup and a per cent reduction of the planned capacity of each project.

Government Gazette 4333 B΄12-8-2022

Suspension of VAT on newly-built real estate: possibility of extension until at least 2025

Based on the Proposal for a Directive on VAT rates of the EU Council of Finance Ministers, adopted on 7 December 2021, the Greek Ministry of Finance may extend the VAT “freeze” on supplies of real estate until at least 2025. Alternatively, it will be able to impose the reduced rate rather than the maximum rate.


The current VAT suspension regime

From 2006 until today, the legislation provides for the imposition of the high VAT rate (18% then and 24% now) on newly built properties. From the beginning, an exemption was set for the first residence.

Since 12/12/2019 there is a suspension of VAT in newly built properties (Law 4649/2019). It is an optional scheme and therefore requires the taxable builder of properties for sale to apply to the tax office of his/her domicile in order to be granted a suspension.

Once the suspension decision is issued, it is valid until 31/12/2022.


The new ECOFIN Proposal for a Directive

Under the new Directive, which will enter into force upon its incorporation into Greek law, the Ministry of Finance may extend the measure of suspension of 24% VAT on real estate for another two years with the prospect of reduction or even abolition from the year 2025.

Thanks to these measures, the construction activity and the market, in general, are stimulated since buyers will be able to purchase tax-free properties that do not enjoy the exemption for the first residence. Of course, builders are also favoured, as even in the case of consideration, they will be able to build new buildings fully exempt from this charge.

Reduction of Capital Accumulation Tax rate for corporate capital increase

The recent Greek Law 4839/2021 (Government Gazette A΄181/02-10-2021) included important urgent measures to support the Greek economy and entrepreneurship in times of pandemic, with the most important being the generous tax reductions and exemptions. In particular, a new regulation is introduced regarding the reduction of the Capital Accumulation Tax.

Specifically, Article 21 of Law 1676/1986 was amended, and the rate of Capital Accumulation Tax for corporate capital increases is reduced from 1% to 0.5%, for capital increases that will take place from 01.10.2021 onwards. Thus, for example, in case a Private Company wishes to increase its capital by 400,000 euros, whereas under the previous regime it would have to pay a tax of 4,000 euros, under the new regulation it will have to pay a tax of 2,000 euros.

By comparison, it is worth noting that for financing a company with a loan instead of a capital increase, the stamp duty rate is 2.4%, and that the stamp duty rate for financing from a partner’s deposit instead of a capital increase is 1.2%. Therefore, between the options given by the legislator to companies that seek further financing, the capital increase remains the most advantageous. Finally, it is noted that the Capital Accumulation Tax on the establishment of new companies has been abolished, and is therefore only imposed on subsequent increases.

New Greek law increases the tax-free amount for gifts and parent-to-child donations

The recent Greek law 4839/2021 (Official Gazette issue A΄181/02-10-2021) includes generous tax reductions and exemptions, including regarding the taxation of gifts and parent-to-child donations, in the context of taking urgent measures to support the Greek economy during the pandemic.

In particular, Article 44 of Law 2961/2001, which provided for a maximum tax-free limit of EUR 150,000 for gifts and parent-to-child donations, was amended and a new limit of EUR 800,000 was set. Therefore, gifts inter vivos and parent-to-child donations of any assets from 01.10.2021 onwards are exempted up to this amount.

The persons exempted up to the amount of EUR 800,000 are the following: a) the spouse of the deceased, b) the person who had entered into a cohabitation agreement with the deceased and which was dissolved upon the death of the deceased, provided that the cohabitation agreement lasted at least two years, c) first-degree descendants, i.e. children, d) second-degree blood relatives, i.e. grandchildren and e) first-degree blood ascendants, i.e. parents.

The acquisition of amounts from parent-to-child donations or gifts from the above persons, when the amount exceeds the limit of 800,000 euros, is subject to tax, which is calculated independently at a rate of ten per cent (10%).

Tax incentives to foreign investors for the transfer of their tax residence in Greece and for the support of start-up entrepreneurship and innovation

In the context of the restart of the Greek economy and the efforts to boost investment activity, the Greek legislator has undertaken a series of legislative initiatives that, on the one hand, concern the granting of tax incentives to taxpayers who reside abroad and wish to transfer their tax residence in Greece and, on the other hand, aim at enhancing the competitiveness of the Greek economy and improving the economic climate.

Alternative taxation regime for high-net-worth individuals – investors (non dom)

The first initiative was introduced pursuant to Law 4646/2019. It provides for the taxation with an annual flat tax of €100,000 of individuals who will submit a relevant application, transfer their tax residence in Greece and invest in real estate or business or transferable securities or shares in legal persons or legal entities registered in Greece, amounting to at least €500,000. This taxation regime applies to the foreign – source income and this flat tax is paid regardless of the amount of income earned abroad. The period of eligibility for this favourable tax regime is 15 years.

Alternative taxation regime for pensioners

Law 4714/2020 followed and introduced an alternative taxation regime for pensioners who transfer their tax residence in Greece. According to this regime, the pensioner pays tax every year calculated at a fixed rate of 7% for all his foreign – source income. This favourable tax regime lasts for 15 years.

Alternative taxation regime for employees and self-employed persons

The third regime was introduced by Law 4758/2020 and completed the framework of incentives for individuals who transfer their tax residence in Greece. This regime concerns employees or self-employed persons who transfer their tax residence and carry out their professional activities in Greece. Persons subject to this regime are exempted from income tax and the special solidarity contribution regarding 50% of their income earned in Greece from employment or self-employment, while they are exempted from the application of the annual objective expenditure, which is based on their residence or private car. The period of inclusion in this regime is 7 years.


Family offices

Incentives have also been introduced for the establishment of special purpose family offices. These incentives aim to create a transparent and defined framework that will serve the needs of individuals with tax residence in Greece, taking into account best international tax practices regarding the management of their financial/investment flows and family assets. The Greek Family Offices shall employ in Greece at least 5 persons within 12 months starting from their establishment and thereafter, and shall have in Greece operating expenses of at least € 1.000.000 per year. The gross income of family offices will be determined by the cost method plus a profit margin of 7%, while the tax is calculated on this profit margin at the rate applicable to business profits of legal entities.

Incentives for Angel Investors

Finally, significant incentives have been provided to support innovation and start-up entrepreneurship. In specific, Law 4712/2020 provided for that angel investors, i.e. individuals, with tax residence in Greece or abroad, who hold a Greek TIN number and contribute funds to start-ups with the aim of developing them, may deduct from their taxable income in Greece an amount equal to 50% of the amount of the capital contribution and up to a total amount of € 300,000 per tax year. The start-up company shall be registered in the National Register of Start-ups – Elevate Greece.


In the context of the implementation of the above legislation, our law firm has already successfully supported investors wishing to make use of these incentives. These investors are already enjoying the benefits of the low taxation offered in Greece. Our law firm provides comprehensive legal services and specialized advice to its clients both in relation to the application of the above legislation, as well as in relation to all tax or corporate law issues that may arise, supporting them throughout the entire process of implementing their investment and providing legal assistance ranging from the planning of the investment and the legal due diligence, to the project financing and representation before public authorities.

Automatic Exchange of Tax Information

A key aspect of the international cooperation between tax administrations is exchange of tax information. While up until recently, the main legal basis for the exchange of information between tax administrations was the relevant provision of the bilateral tax conventions on Income and Capital, today, the landscape of information exchange has fundamentally changed and the legal framework has become more complex due to the conclusion of international treaties providing for the automatic exchange of tax information.

The book titled “International Treaties on Automatic Exchange of Tax Information – Presentation and Interpretation of the regulations of the International Tax Law”, authored by the Associate Lawyer of MStR Law, Nafsika Tzanavari, and published by Nomiki Vivliothiki, focuses on the examination of these recent developments in the field of international tax law and the related tax issues that arise in the international double taxation and the global economy, consisting an important contribution to the legal doctrine and a very useful legal companion for anyone studying or practicing in the field of tax law.

You can access an abstract of the book here.

Renewable Energy Sources, Energy Storage and Integration into the Greek Network

The law firm MStR Law invites you to the one-day conference “Renewable Energy Sources: Legal aspects of the development and penetration in the Greek Network”, organised by the Hellenic – German Chamber of Industry and Commerce, as part of the business mission of the German Federal Ministry of Economy and Energy. The one-day conference will be held at the Nikopolis Hotel in Thessaloniki on 25 June 2019, starting at 9:00 am. The aim of the one-day conference is to look at the transfer of know-how and the achievement of future partnerships between Greek and German companies and operators active in that field.

MStR Law will participate in the conference with the contribution of its partners, Nassos Michelis and Dirk Reinhardt, on the topic: Renewable Energy Sources, Legal Aspects of Development and Penetration in the Greek Network.

We will be happy to meet you there!

Νew year’s celebration of the Greek-German Chamber of Commerce and Industry

During new year’s celebration of the Greek-German Chamber of Commerce and Industry on 25.01.2019 in Athens, Mr. Norbert Barthle, new delegate of the Chancellor for the Greek-German Assembly, characterized great success for Greece the completion of the program last year and declared further that there are significant perspectives for the Greek economy, referring particularly to the financing of small and midsize enterprises. With regard to the significance of the works of the Greek-German Assembly, he stressed goal would be the upgrade of the relations between the two countries through the dynamic of the Greek-German network of municipalities and regions with practical co-operations. In the discussion with Mr. Barthle, the vice president of the opposition party Nea dimokratia, Mr. Kostis Hatzidakis, referring to a bunch of measures, suggested the reduction of the tax rates from 29% to 24% in the first year and to 20% in the second year in the case of a government by his party. The president of the Greek-German Chamber of Commerce and Industry, Mr. Michalis Maillis stressed that the country has the immediate need for an investment shock, which would lead the economy to real track of growth. The General Director of the Greek-German Chamber of Commerce and Industry, Dr. Athanasios Kelemis, from his point of view,  highlighted that the Greek-German Chamber of Commerce and Industry, as a contribution to the general efforts for fighting brain drain as well as unemployment of young people, is investing systematically in the area of dual professional education, which in the long term has a positive impact for stimulating competiveness of the Greek economy. In the framework of these efforts, as he mentioned, priority had the establishment of the Educational Centre of the Greek-German Chamber of Commerce and Industry in Athens, the “DUAL Hellas”, which has as scope the direct connection of theoretical education with the labor market.

(MStR Law, active member and sponsor of the Greek-German Chamber of Commerce and Industry, active member of the working groups for legal issues, for energy and for human resources)

Αnnual new year celebration of the Hellenic Wind Energy Association (HWEA), 2019

On 26.01.2019, during the annual new year celebration of the Hellenic Wind Energy Association (HWEA), its president Mr. Panagiotis Ladakakos ascertained that in 2018 the first auctions took place for applying the new Feed in Premium instead of the former Feed in Tariff System. According to the statistics of HWEA, in 2018 were connected to the grid 103 new wind generators of total capacity of 191,6 MW. This corresponds to an annual increase of 7,2% in 2018 in comparison to the end of 2017. In the same period old wind generators of a total capacity of 15,43 MW were uninstalled, which are already replaced by new wind generators (repowering). That means that the total wind power at the end of 2018, actually in commercial or test operation, was 2.828,5 MW. (MStR Law, member of HWEA, responsible Dirk Reinhardt)