The provisions of the Investment Incentives Law 4399/2016 (the “Law”) provides investment opportunities for development of networks, synergies and cooperative initiatives between Greek and Israeli companies in the following key sectors:
• Agribusiness and Food Sector
• Information & Communication Technology
The Agricultural business is supported by a number of European funds run by the Rural Development Program of the EU and other national funds and a series of measures for small farms, start- up aid, investment in forest areas and other initiatives.
There is a steadily increasing interest in the tourism investment in Greece supported by a 2 billion euro investment budget for tourism projects in Greece by the European Investment Bank (EIB). In addition, the Law provides for various private investment aid schemes such as tax exemptions, cash grants, leasing subsidies, wage costs subsidies, rapid licensing and fixed tax regime for a certain period of time.
The Information & Communications Technology sector is backed up by a variety of incubators for start-ups, existing funding for the R& D activities, for the acquisition of tangible and intangible assets, for wage costs and is focused in the areas of software design & development, in the provision of information security services, data and training centers, B2B cloud services, multilingual call centers, assembly and distribution of ICT devices and mobile marketing and advertising.
Lastly, the investment opportunities in energy refer to new infrastructure in natural gas transmissions, renewable energy projects, waste to energy, hydrocarbons exploration and development, grid connectivity projects, high – end R&D etc.
1. Fast Track Procedure
The Fast Track Procedure (the “FTP”) is applicable to high end strategic investments in Greece that in general either exceed a threshold of the investment budget and/or create a certain number of new jobs. Any investment that may fall within the FTP is entitled to absolute priority, one-stop-shop, 45- day deadline for the issuance of most of the necessary permits, residence permits and a number of tax incentives. For more information on the FTP you may visit: http://www.enterprisegreece.gov.gr/en/strategic-investments.
2. Double Taxation Treaty
The Convention between the Hellenic Republic and the State of Israel for the avoidance of double taxation (the “Convention”), covers any tax imposed on income, on gains from the alienation of movable or immovable property as well as taxes on capital appreciation. The full text of the Convention is available, both in Greek and in English, at the web site of the Greek Independent Authority of Public Revenue: http://www.aade.gr/sites/default/files/2017-03/FEK_ISRAIL.pdf
3. A Brief Overview of Taxation in Greece
Taxable income is income, such as employment and pension income, business income, capital income and capital gains arising from the transfer of assets. after allowable deductions from the gross income are made.
Different tax rates shall apply for the income categories.
Corporate tax rate for all taxable legal entities, i.e. tax on total annual profits, as of 1.1.2016 is 29% for any corporate income profits.
Dividends or profits distributed by a legal entity, which keeps a full set of “double-entry” accounting books, are subject to withholding tax at a rate of 15%. Profits deriving from a branch of a foreign company as well as from any legal entity which keeps simplified single-entry accounting books are not subject to any withholding tax on distribution.
The standard VAT rate is 24%
All properties in Greece, either belonging to individuals or legal entities, on the 1st January of every year, are burdened with the Single Real Estate Property Tax (“ENFIA”) to be determined by several factos http://www.publicrevenue.gr/elib/view?d=/gr/act/2013/4223/art/50/para/3
As of 1.1.2016 only for buildings, for which the building permit was issued after that date, a VAT of 24% is imposed on the first sale of newly built buildings by a manufacturer. For all other properties, which don’t have the obligation to pay VAT, the transfer of property is charged with real estate tax at 3%.
4. Transfer of Funds/ Repatriation of Profits
In general, the acceptance and execution of the transfer of capital abroad is permitted under certain conditions and restrictions, in accordance with the applicable capital control regulations in Greece. Those conditions are gradually relaxed through Ministerial Decrees.
Disclaimer: This document has been prepared for information purposes only. It is not intended to provide legal advice. Readers are advised to seek independent legal advice prior to acting on any statements contained hereinabove.