Greece: Tax-Efficient Sectors
Investments in Small Islands
Previous fiscal benefits applied to business activities based in small Greek islands which have fewer than 3,100 inhabitants. The legislation applied until 2006 and was of potential interest to hotel and tourist operations.
Business entities which qualified for this regime were entitled to a 40% reduction in all business taxes.
A new, general-purpose development incentive law was promoted by the government in 2005 and was received very warmly by the business community. In the first ten months of its implementation (end of March 2005 till the end of January 2006) 1,234 applications were submitted accounting for EUR2.47bn.
The law offers a combination of incentives and corporate tax breaks and is aimed at sectors of the economy that are open to international competition, such as tourism, information technology, financial services, and quality agricultural exports.
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 as a major driver for investment.
The new investment incentive law will include provisions for public private partnership schemes for new infrastructure projects, such as marinas.
The National Strategic Reference Framework (NSRF) plans to concentrate 82% of its EUR40bn budget on the development of regional projects, 'giving investors ample opportunity to participate in a wide number of projects.'