Greece: Certain tax changes have been included in the draft Budget of 2022

Corporate taxation 

• Greece enacted the reduction of the CIT rate from 24% to 22%, from 2021 onwards. This measure has already been adopted by virtue of Law 4799/2021. 
• Reduction of the capital duty tax rate from 1% to 0.50%, for transactions for which the tax liability arises as from 1 October 2021. This measure has already been adopted by virtue of Law 4839/2021. 
• 75% reduction of advance payment for CIT, for companies that have been affected by the COVID-19 pandemic. 

Individual taxation 

• Increase of the minimum wage by 2% as from 1 January 2022. 
• Increase in the tax-free amount for parental gifts or gifts to first-degree relatives from EUR 150,000 to EUR 800,000, with regard to parental gifts contracted as from 1 October 2021 for the beneficiaries of Category A’ (indicatively between spouses, between parents and children, etc.). It is worthnoting that the above tax-free amount is also extended on donations or parental grants of cash, that are paid through credit institutions, to aforementioned beneficiaries. 
• 3% reduction of social security contributions for employees and employers. 
• Suspension of the payment of special solidarity contribution for private sector employees.
• 55% reduction of advance payment for personal income tax (PIT), for self-employed individuals, who have been affected by the COVID-19 pandemic. 

Value added tax (VAT) other measures 

• Reduced VAT rates are provided, for amongst others, specific agricultural, farming goods, industrial food and the provision of services by gyms and dance studios. The application of the reduced VAT rate relevant to dining, tourism etc. is extended until 30/06/2022. 

Tax Incentives & Other measures 

• Introduction of tax incentives for mergers and collaborations among medium, small and very small enterprises, such as the 30% reduction of the income tax due for three years, up to the amount of EUR 1 million (for mergers) and EUR 100,000 (for collaborations per each contracting party). The present incentive it is not applicable in construction consortiums.
• In the draft law there are provisions for the requirements regarding tax losses that can be carried forward for the new entity after merger, provided that their total turnover is greater than the amount of euro 450.000 (specific transactions among the parties excluded). 
• Introduction of an increased deduction regarding expenditures related to green economy, energy, and digitization. 
• Extension of the suspension regarding the 10% pay-tv fee until 30 June 2022. 

The above measures regarding mergers and collaborations among medium, small and very small enterprises have not yet been enacted. On the 1^st of November the public consultation phase expired, and the new law is being expected to be published soon.