The Tax Hub

The Greek Ministry of Finance has issued a release on its four-phase plan for supporting and reopening the economy in light of the COVID-19. The key points of the release concern the third phase, which is to begin implementation next week. These are summarized as follows:

• Continued support will be given for employment in relation to employment suspension and insurance contribution coverage, as well as other new supports for employment;
• Further support will be provided for the suspension of the payment of certified tax debts for the month of June for businesses that remain closed and businesses in tourism, catering, transport, culture, and sports sectors;
• The 40% rent reduction for affected businesses is extended for June, and is further provided for the tourism, catering, transport, culture, and sports sectors for the months of July and August;
• Relief for property owners that rent property to affected businesses is also extended, including suspension of tax payment;
• The Ministry will provide a reduction in advance tax payments for 2020 and 2021 for companies that have shown a decrease in turnover in March, April, and May 2020, with the reduction based on the percentage reduction in turnover;
• A number of VAT rate reductions are provided, which include that the rate on the following supplies is reduced from 24% to 13% from 1 June to 31 October 2020:
  • Passenger transport, which covers transport by train, metro, and tram, by city and intercity buses, by plane, by ship, and by combined transport;
  • Coffee and non-alcoholic beverages; and
  • Cinema tickets;
• The VAT rate on tourist packages is also reduced from 80/20 (80% at 13% and 20% at 24%) to 90/10 from 1 June to 31 October 2020; and
• The 30% tax deduction for R&D expenditure will be increased to 100% for expenses incurred from 1 September 2020.

Although not clear from the release, the R&D deduction is assumed to refer to the 30% super deduction, i.e., a 130% deduction for qualifying expenditure, meaning a 200% deduction will be provided. Further details will be published once available.