ECONOMY

VAT exemption for big firms using Greece as transit hub

Major groups that opt to ship their products to Greece and use the port of Piraeus as a hub from which to distribute them to other countries in the region will be exempt from paying value-added tax, according to a draft law amendment submitted in Parliament on Thursday by the Finance Ministry.

Under certain conditions provided for in the amendment, imported goods will not be subject to VAT but they will be monitored up to their export to third countries, within or outside the European Union, as is also the case in France and the Netherlands.

The tabling of the amendment came a day before the signing of an agreement that will see Hewlett Packard (HP) make Piraeus its distribution center for products heading to other European and Middle Eastern countries.

Among the stipulations the companies must satisfy are that they are not based in Greece, that the value of imports exceeds 120 million euros a year for the first five years and 300 million euros thereafter, and that over 90 percent of goods are delivered to other countries annually. The aim of the clause is to make Greece a regional transit hub for multinational companies’ commodities, as well as a gateway for non-European Union firms wishing to penetrate the EU market.

HP’s investment will be able to start bearing fruit immediately as Development Minister Costis Hatzidakis officially opened the rail link on Thursday between Ikonio, near Piraeus port, and Thriasio in western Attica.

The 17 km line will facilitate the transport of goods and was a condition for the implementation of the agreement between Cosco, operator of Pier II in Piraeus, and HP for the US firm to use Greece as a distribution base from which to ship its products to Eastern Europe and the Middle East.

The deal, which also involves train service operator TRAINOSE, will be signed on Friday.

“The port of Piraeus used to be isolated, but now it is entering a new era of combined transport,” said Hatzidakis, while Merchant Marine Minister Constantinos Mousouroulis said that the rail link “will now make Piraeus port fly,” adding that it will also create new jobs.