Greece: Tax-Efficient Sectors
Aspects of the Greek regional investment incentive regime were included on the list of 'Harmful Tax Practices' issued by the EU's Code of Conduct Committee prior to 2005 and the government made changes.
The incentive provisions under the Investment Incentives Law highlight three main categories of investment incentives: cash grants, subsidies or tax allowances. The objectives of the law, according to government officials are:
- To challenge and reinforce new entrepreneurial activities, e.g. theme parks, broadband networks, renewable energy sources, environmental protection, desalination plants, warehouses, logistics and distribution centres; and
- To give special emphasis to capital intensive investments.
Cash grants under the law are available up to 55%. A new committee has been formed to facilitate and simplify administrative investment procedures and to check whether the following requirements are met:
- Minimum own equity contribution required is 25%. Evaluation time for business plans within two months. Upon approval of the investment incentives application, the incentives payment plan is predetermined and scheduled. Investments located in industrial and business areas, investments for the development of four and five star hotels etc., receive an additional 5% subsidy.
- Small and medium size companies are eligible for up to 15% cash grants.
The Incentives Law is applicable to enterprises having business activities in the following sectors:
- Primary (e.g. greenhouses, animal farms, fisheries etc). Secondary (e.g. manufacturing, energy etc).
- Tertiary: Tourism (hotel units, conference centres, marinas, theme parks, golf courses, development of mineral springs, thalassotherapy centres, health tourism centres, centres for training-sports tourism etc); -or other services (e.g. applied industrial research laboratories, commercial centres, software development, supply chain services, logistic centres etc.).
NB: The law was suspended as of 29/1/2010 and, following consultation, the Ministry plans to reform the Investment Law to make it a major driver of a new development model, focussing on green development.