ECONOMY

Draft law to overhaul tax exemption for investments

The Finance Ministry is planning to overhaul the tax incentives for the attraction of investments and has already started drafting a bill to be tabled in Parliament this fall. This will form part of the revised agreement between Athens and its creditors and will apply from January 2014.

The country’s international lenders have asked for a corporate tax exemption overhaul, since in most cases the system leads to tax evasion instead of serving its original purpose due to the lack of a specific framework and transparency, with some exemptions being effectively hidden.

For instance, foreign nationals who live and work in Greece are only taxed for their income generated in this country – unlike Greek citizens – thereby depriving the state of a significant amount of tax revenues.

Among other provisions, the bill will provide for the exemption of invested funds from taxable income, only on a far more rational basis, and allow for the acceleration of asset depreciation, even within the same financial year. The draft law must be ready by end-September.