BUSINESS

Corporate tax set to drop by almost a third

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Business

Greek businesses will feel some of the tax burden lifted off their shoulders very soon, after Prime Minister Kyriakos Mitsotakis announced on Sunday that corporate tax will be reduced from 28 percent to 24 percent for this year and to 20 percent in 2020, but also that the dividend tax will be halved from 10 to 5 percent next year.

Over the past few years, businesses had to pay 55 percent of their profits to the state in the form of taxes and social security contributions, and were desperate for measures that would enhance their competitiveness and sustainability.

The changes to corporate taxation this year will not affect the revenues of the current budget but those of the next one, as businesses will pay the reduced tax in 2020, while the further cuts planned for next year will concern the revenues of the 2021 budget. The cost of the corporate tax cut for next year’s budget is therefore calculated at 250 million euros, plus another 250 million for 2021 revenues.

Based on this, the average corporate tax (income and dividend taxation) will drop from 35.2 percent for 2018 incomes to 27.8 percent for this year and to 24 percent for 2020.
 

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