COVID-19: Emergency tax measures adopted in Greece

Local contact

Stephanos Mitsios

20 Mar 2020
Subject Tax Alerts
Categories Corporate Tax
Jurisdictions Greece

As a response to the current unprecedented crisis situation due to the spread of COVID-19 (coronavirus) and the necessity of tackling it, the Greek Government proceeded with the adoption of – among others – certain tax measures. 

Up to date, the measures consist of the following:

A.  Act of Legislative Content 11.03.2020 Suspension of VAT and tax debts payments for enterprises

► The payment of VAT becoming due is suspended for affected enterprises. During the suspension period, no late payment interest or surcharges will be calculated.

► The payment of debts assessed and due to the Tax Administration as well as the payment of debt installments or partial repayments due are suspended for affected enterprises. During the suspension period, no late payment interest or surcharges will be calculated.

► Ministerial Decisions to be issued will determine which enterprises are considered as affected, the suspension period and all other necessary details.

B. Announcements of the Ministry of Finance (18.03.2020)

Awaiting the issuance of the abovementioned Ministerial Decisions, on 18.03.2020 the Ministry of Finance announced that:

► The suspension of the payment of taxes will apply to specific enterprises according to their activity code number (“ΚΑΔ”), irrespective of whether their operation remains active, partly active or suspended by virtue of Government order or on their own initiative. The Ministry of Finance has announced today (20.03.2020), by virtue of a Press Release, the list of activity code numbers (“ΚΑΔ”) of enterprises affected. The emergency tax measures will apply to enterprises having their Principal KAΔ included in the list. The list is evolving and subject to updates.

► These measures are targeted for payments due in March, however they may be extended.

► The abovementioned suspension period will last for 4 months.

► As a prerequisite for applying the payment suspension, enterprises must retain all existing job positions. 

In the same Announcement (18.03.2020), the Ministry of Finance also declared the following:

1. Suspension of taxes payment to self-employed taxpayers

► All tax obligations of the affected self-employed persons due in March are suspended for a period of 4 months.

2. Reduction of VAT rate applicable to certain goods necessary for the protection against COVID-19

► The applicable VAT rate is reduced to 6% (from 24%) until the end of 2020 for certain goods such as: • protective masks and gloves, • antiseptic products, wipes and relevant products, • soap and other products used for personal hygiene purposes, • ethyl alcohol, if used as raw material for the production of antiseptics.

3. Real estate / rents

► Enterprises that their operation is mandatorily suspended shall be liable to pay 60% of the agreed rent for their business premises for the months March and April.

► The employees of the abovementioned enterprises whose employment contract is mandatorily suspended shall pay 60% of the agreed rent for their main residence.

► The tax obligations of the landlords of the above real estate properties shall be suspended for a period of 4 months.

► The new objective value system will be launched as of next year whereas the Unified Real Estate Ownership Tax will be calculated based on the currently existing rules for year 2020.

4. Refund of debts due by the Greek State

► The Tax Administration, effective immediately, shall proceed with the refund of debts due to the taxpayers up to €30,000.

5. Financing of enterprises

► The Greek State is currently examining the adoption of an expanded financing framework for all affected enterprises, in the form of a refundable prepayment, with extended repayment schedule and grace period.

► The granting of said financing will take into consideration: • The reduction of the business turnover; • The employee-related costs; • The retainment of existing job positions.

► The repayment of loan installments owed to Greek banks is also suspended until at least 30.09.2020 for affected enterprises. Contractual interest shall still be due and paid. 

C. Law 4675/2020 – VAT measures in relation to ethyl alcohol

► All manufacturing activities for the production of antiseptics by industrial and craft enterprises for the benefit of the Ministry of Health are VAT exempt, whereas the relevant input VAT will be deductible. 

D. EU support measures

► A special investment fund is established in order to support SMEs, the labor market, as well as other vulnerable sectors of the economy.

► The provision of capital and investment funding out of the European Central Bank’s resources is currently under examination.

► The drafting of an EU Directive has been announced for the provision of state aid by means of grants or tax incentives.

Issues affecting the market given the extraordinary situation caused by COVID-19

► The determination of the enterprises “affected” by the situation and eligible for benefiting by the tax measures introduced is questionable, given that, inevitably, all enterprises are affected.

► The scope of taxes covered by the suspension of payment is not yet clear, i.e. it is not yet clear whether all taxes are captured, such as withholding taxes, (including payroll taxes), stamp duty, inheritance and donation taxes.

► The introduction of an installments scheme to the benefit of taxpayers could be examined, to be applied following the lapse of the (4-month) suspension period.

► The potential of granting an extension to statutory deadlines for filings of informative character (such as, the change of activity code number “ΚΑΔ”), should be also examined, in light of the fact that tax offices are not in a position to fully function.

► In the same context, a suspension of statutory deadlines should be granted for tax cases being at the stage of administrative appeal and pending before the Dispute Resolution Directorate.

► Furthermore, given that a number of enterprises actively contribute in tackling the situation by granting donations to the health system, it is imperative that a legislative provision is introduced allowing the VAT deduction on such donations for the benefit of public interest.

► Subsequently and in the long run, it should be further examined whether the provisions already applicable for the deduction of bad debt provisions and bad debt write-off for income tax purposes suffice to capture also the situations that will probably arise in the market due to COVID-19. 


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