The exemption of agricultural oils from the Special Consumption Tax (SCT) becomes permanent with the application of a zero rate from 2025, according to a provision included in the bill on Digital Transaction Tax presented to Parliament yesterday.
The same bill provides for an incentive for donations to the Greek State by legal entities, since it is foreseen that these donations from legal entities to the State will henceforth be deducted in full from the donor’s taxable income, while at the same time introducing new digital tools that will provide the AADE with the ability to monitor and impose sanctions on providers of Electronic Data Issuance Services.
Furthermore, the ENFIA exemptions are extended to the regions of Northern Aegean and Thessaly that have been affected by natural disasters, while corresponding extensions will follow for other tax obligations.
Specifically with the bill:
- The exemption of agricultural oils from Special Consumption Tax becomes permanent with the application of a zero rate from 2025, as promised by the government. Farmers, upon presenting their olive oil purchase invoices through a procedure to be determined by Ministerial Order, will receive a refund of the tax they paid each year. The Ministry of Finance states that the refunded amount of Special Consumption Tax is inalienable and non-confiscatable.
- It is stipulated that donations from legal entities to the Greek State will be deducted from their taxable income. The aim of the regulation is to encourage social contribution by companies by providing the tax incentive that is introduced and to relieve, to a certain extent, companies that implement social responsibility actions in this regard.
- The AADE audits and penalties provided for violations related to the use of cash registers are extended to Electronic Information Issuance Service Providers in cases of violation or falsification or interference in the information transmitted to the Tax Administration. Among other things, it is foreseen that the AADE may suspend the use of NIFs or their operation, impose sanctions if the documents issued through the software of this provider are not transmitted to the MyData digital platform, due to the loss of communication between the person subject to be transmitted or the provider and the AADE while the failure to declare the definitive cessation of electronic fund transfer terminals at the point of sale, as well as the issuance of tax information through an approved and undeclared electronic tax mechanism or electronic issuance of information by a provider or declared and undeclared electronic tax mechanism becomes penalized. Furthermore, the pecuniary reward applicable to complaints regarding the issuance of receipts by counterfeit cash registers through the “Appodixi” application extends to complaints regarding malfunctions of Electronic Document Issuance Service Providers that lead to the application of a fine.
- The exemption from ENFIA for areas of the Northern Aegean and Thessaly affected by natural disasters is extended until 2024. In the coming days and in the context of the discussion of the draft law, provisions will be presented for the extension of tax and other exemptions in Thessaly due to Storm Daniel and then the relevant Ministerial Decisions will be issued which will have retroactive effect from 09/05.
- For debt settlement requests to the Tax Office that are submitted by December 31, 2024, it is expected that an evaluator’s certificate proving the debtor’s capacity to meet the settlement will not be required.
The provisions relating to the postage stamp
The seal regulation provides for the following:
- Stamp Duty is abolished on several important transactions, such as: public service loans, insurance transactions, incorporation and capital increase of non-profit legal entities/persons, bank credits guaranteed in favor of importers, contractual interest on loans and credits.
Additionally, it is abolished in more than 100 transactions that involve stamps on receipts (e.g. marriage certificate, professional licenses, etc.). - It is also abolished in more than 500 transactions on which a Stamp Duty of 2.4% or 3.6% was imposed on reservations relating to the NPDD or the State (e.g. Stamp on Reservations in favor of the National Medicines Organization (EOF), in favor of TACHDIK (Court Buildings Fund), in favor of EADISY (Independent Public Procurement Authority) etc. For reasons of complete legal certainty, it is expressly provided that no Digital Transaction Tax is imposed on contracts, transactions and operations that fall within the scope of the Value Added Tax Code, the Tax Code on Inheritance, Donations, Parental Benefits and Winnings from Gambling (Law 2961/2001), real estate transfer tax, capital accumulation tax, bank tax and car transfer tax.
- The new Digital Transaction Tax is introduced, which will be imposed on transactions expressly designated in the law, regardless of the place where they are carried out, provided that at least one of the contracting parties has tax residence or a permanent establishment in Greece and there is no ground for exemption for the contracting parties. These transactions are not subject to other indirect taxes.
The Transaction Fee for transactions between individuals will be confirmed after the electronic declaration has been submitted through a new digital platform that will be put into operation by AADE. The declaration and refund of the Fee is made by the end of the month following the transaction.
This excludes cases where there is an obligation to withhold income tax (certification and payment are made based on the withholding tax deadlines), rents (payment is made by submitting the Income Tax Return) and current accounts (declaration and declaration are made in the first month of the following tax year). In transactions with the State, the Transaction Fee is paid electronically before the respective act is drawn up or issued.
The Digital Transaction Fee coefficients for transactions between individuals are clarified and defined as follows:
- 3.60% on real estate income, on invoices for the collection of compensatory legal interest and default interest and on transactions or contracts between individuals who do not carry out business activity and individuals who carry out business activity and are hired for acts unrelated to the same, as well as in cases where the contractor is a State, Municipality, PNDD.
Regarding rents, it is clarified that: the Digital Transaction Tax does not apply to leases subject to VAT and residential rental contracts. The landlord is responsible for declaring and paying the Digital Transaction Tax. If the landlord is not required to file an income tax return, the tenant is responsible for filing and reporting. - 2.40% provided that all contractors or stakeholders carry out business activity, or at least one has the legal form of SA, EPE and IKE.
- 1.20% if it is for payment of fees to individuals or administrators and for deposits or withdrawals of funds from legal entities and entities.
- 0.30% on checks presented (“plaques”) to credit institutions.
With other provisions of the bill:
- The exclusive use, management and operation of the Galatsi Olympic Centre is granted to the Municipality of Galatsi for 40 years. Instead of compensation, the Municipality is obliged to repair the damage to the roofs of the buildings of the facility, assume the obligation to modernize the energy efficiency of the buildings of the facility as it gradually becomes energy independent and to report to the Minister of Economy and National Finance and the ET every five years. ADSA for the development of the use of the facilities and the progress of its obligations. At the end of the concession, it will return the properties with the improvements it has made, which remain in the benefit of the State without the Municipality of Galatsi being entitled to compensation for them. The concession will be revoked if the Municipality does not carry out the necessary extensive repairs to the roofs of the buildings of the complex and, of course, if the Municipality does not accommodate the free public services as promised.
- The free transfer of real estate from European Union states to non-profit legal entities for the fulfilment of their educational and cultural purpose is exempt from presumed income and ENFIA.
- The AADE is designated as the competent authority in relation to transnational cooperation within the European Union with the United Kingdom and Norway in tax and customs matters.
- The maximum value of the Pre-Tax Sale Price of a car granted for professional use and not considered as income is increased to 20,000 euros.
Minister of Economy and National Finance Kostis Hatzidakis said: “With the Digital Transaction Tax Bill, we are moving forward with a further modernisation of tax legislation. We are abolishing stamp duty for over 600 transactions, with direct benefit to taxpayers, and introducing the Digital Tax with a clear scope through the digital platform. We are introducing new electronic tools that facilitate the audit work of the AADE to limit tax evasion. And we are promoting useful modalities for society, such as the tax deduction of donations to the State and the exemption of agricultural oil from the Social Security Tax, as we had promised.”
The Deputy Minister of Economy and National Finance, Christos Dimas, stated: “The abolition of Stamp Duty for over 600 transactions and its replacement by the Digital Transaction Tax is a measure that aims to relieve citizens, professionals, companies, but also the State of the bureaucratic procedures that have burdened them until now. More specifically, the reform concerns the modernisation, simplification and digitalisation of a legislative framework that has been in force since 1931, but also its abolition – where necessary -. We are therefore leaving behind the current outdated Stamp Duty framework and, by leveraging new technologies, we are addressing long-standing issues that have caused confusion for citizens and ambiguities in the application of tax legislation. The objective of the regulation is to modernise the legal framework for the collection of transaction taxes, simplify and digitalise the process, rationalise the basis for the collection of transaction taxes, as well as reduce administrative burdens.