Voted tax bill: “Tackling tax evasion and other provisions”

Sole proprietorship and freelancer income

• The annual freelancer fee due in the name of individuals contacting business activities is reduced by 50%, with effect from the tax year 2023, equals to 325 euros (from 650 euros) and 300 euros (from 600 euros) for their branches. The reduction is not applicable for those treated as salaried employees (contract with up to three employers or 75% of their income deriving from a single entity).
• The application of indirect audit methods for determining the taxable income of individuals contacting business activities will further be used by the Greek tax authority especially in cases of significant mismatch of financial data (purchases – sales – inventories), of gross profit indicators and in the event where the taxpayer is unable to justify how business expenses are settled during a 3- year period of consecutive declared losses.
• A new article (28A) is introduced in the Greek CIT law regarding the direct deemed determination of the net annual income of freelancers, as derives from the auditing and economic contribution of a combination of factors such as: The highest amount among the Greek labor law minimum wage and the earnings of the highest paid employee of the business under examination, a contribution rate of 10% on personnel payroll expenses and finally a 5% rate on the difference among the turnover and the average annual turnover of similar businesses registered under the same activity.
• The minimum annual deemed income determined by the new law can be challenged by the taxpayer due to multiple reasons and circumstances i.e.: military service, hospitalization, pregnancy, natural disasters, force majeure as well as any other reason that may be substantiated during a tax audit and finally reduce the minimum annual deemed income accordingly. Various exemptions are also applicable for individuals declaring agricultural income, freelancers indicated in par. 2 of article 12 of the Greek CIT law (3 employers). Specific reductions are provided for the first years of business activity, for cases of various sources of income (pension, agricultural income or salary), for multi-child families and several other categories. The income considered during the examination of the eligibility criteria for receiving social benefits will be the higher among the declared one and the minimum set by the new law. Finally, special provisions are applicable in cases where a freelancer ceases their business activity while commencing the same business as a partner of a single-member company.
• The above measures are effective as of January 1st 2023.

Universal implementation of e-books (mydata) and electronic payments

• Revenue declared by the businesses cannot fall short of the income transmitted through the e-books while expenses not transferred to the system will not be considered as deductible.
• Banking institutions and payment service providers should keep records of their customers’ cross-border payments that will facilitate Greek tax authority audits regarding VAT. Non-compliance incurs corresponding fines.
• The penalty imposed for transactions over 500 euros performed with the use of cash is amended and now incurs a fee double the amount of the transaction. The penalty used to be 100 euros in such cases.
• The new article 54IC of the Greek fiscal procedure code introduces penalties related to the overdue transmission of the data and information compulsorily transferred to e-books by businesses and commercial entities.
• The incentives of Article 71F of the Greek CIT law for businesses implementing electronic invoicing through a provider (direct tax refund process, reduced statute of limitations and increased depreciation rates for equipment) are now applicable until December 31st 2024.

Short-term rentals

• Effective January 1st 2024, individuals renting out three (3) properties or more in the context of short-term leases of the article 39A of the Greek CIT law, are considered to gain revenue from business activity and therefore will no longer be taxed according to the individual rental income tax scale, instead they will have to comply with the obligations of a hotelier (insurance contributions, service VAT, etc.).
• Short-term rental is defined in Article 111 of Law 4446/2016 and now refers to a rental with a duration of less than 60 days and regardless of whether it is booked through a digital platform. The fines for non-compliance with the obligations related to the short-term Rental Property Registry are also increased and now amount to 50% of the annual gross income, with a minimum fee of 5.000 euros.
• In cases of renting-out apartment buildings as a whole through short-term leases, an obligation of issuing a special tourist operating mark (E.O.T) arises.
• A resident fee of 0.5% on the rent for short-term rentals is imposed.

Additional real estate regulations

• Real estate transaction related payment fees depicted in notarial deeds can exclusively be processed through a bank. Cash use is restricted in all such cases. Real estate notary contracts involving cash payments are considered invalid while related penalties will be imposed at 10% of the deed fee starting from 10,000 euros and may reach amounts up to 500,000 euros.
• The accommodation fee is replaced by the so-called climate crisis resilience fee which is payable by the resident, and it is imposed per daily use and according to different rates per category and per period as follows:

• Category	March – October (€)	November – February (€)
  1-2 stars	1,50	0,50
  3 stars	3,00	1,50
  4 stars	7,00	3,00
  5 stars	10,00	4,00
  Key apartments	1,50	0,50
  Short-term lease	1,50 (10,00 house>80sm)	0,50 (4,00 house>80sm)
  Tourist villa	10,00	4,00

  • Expenses of energy and functional upgrading of buildings carried out by individuals through electronic means of payment can reduce the income tax obligation of those persons if distributed equally over a period of 5 years with a maximum limit of 16,000 euros.

  Amendments in specific tax rates

  • The capital accumulation tax rate is reduced from 0.5% to 0.2% while the transaction duty imposed on the sale of listed shares is set at 1/1000 from 2/1000.
  • The reduced VAT rates applicable for transactions or services related to art, coffee, catering, transport of persons, cinema and zoo tickets, public health products, gyms etc. remain in force, while the sale of non-alcoholic beverages is subject to the standard VAT rate.

  Simplification of procedures related to special VAT regimes and related clarifications

  • Simplifications and clarifications are introduced for special regime liable persons of articles 47A, 47B, 47C, 47D of the Greek VAT code (electronic commerce, services from third countries, etc.) receiving a special VAT number and submitting a single VAT return in Greece as the member state country or the country of consumption.

  Measures against illegal distribution of energy products

  • Legal entities that distribute wholesale energy products must comply with due diligence measures and control of gas station businesses by maintaining a tax register, a control of operating permits and installation of an input-output data monitoring system, performing chemical analysis of fuel composition as well as cooperating and updating the relevant Greek authorities for any violations observed. Failure to comply with the prescribed measures entails significant sanctions and fines for gas station businesses as well as for legal entities that are obliged to comply with the rules of due diligence as depicted through a detailed reference in the new law.

  Violations related to online tax cash registers

  • Article 54F of the Greek code of tax procedures is amended by introducing paragraphs related to the possibility of reporting tax violations by formal charge through the scanning application “QR Code Apodixi“. Individuals filling charges are eligible for financial rewards in case an audit is carried out and  a related infringement occurs. The reward amounts to ten times the value of the transaction with a maximum of 3,000 euros.

  Separate income tax returns for spouses

  • Spouses may opt to file separate personal income tax returns through an application submitted by February 28 as emphasized in the new law. Therefore, spouses who need to submit a separate income tax return for the year 2023, should submit a relevant application by February 28, 2024. This act is binding for the specific year.