Special favourable tax treatment for foreign companies providing services to their central management and control offices or to associated companies.
Incentives to foreign corporations
Foreign companies may be registered in Greece enjoying a special tax status when having as their sole activity to provide services to their central management and control offices or to associated companies (as defined in article 42e of Normative Law 2190/1920) and to businesses which are not established in Greece, according to the provisions of Law 89/1967, as amended by Law 3427/2005.
Such services may be consultancy services or services of central accounting support, quality control services regarding the manufacture, products, procedures, or services of drafting of studies and contracts, advertising and marketing services, or services of data processing, of receiving and providing information and research and development.
Those companies are obliged to employ within 12 months from the date of the permit granting at least 4 persons as personnel in Greece and to have at least a hundred thousand euros per year as operation costs in Greece.
In order for any prospective company to be classified to the provisions of Law 89/67, a special permit is required. This permit is granted by a Decision of the Minister of Economy and Economics, which shall be then published in the Government's Gazette within 50 days from the submission of the related application to the Department of Foreign Capitals in the Ministry of Economy and Economics.
With a decision issued by the procedure described above, the permit in question may be recalled if there exist breaches of its terms or of Law 89/1967.
The above mentioned companies are taxed with the normal corporate income tax rate as apply in Greece, thus, for tax year 2011 the rate is 23%, for the tax year 2012 the rate is 22%, for the tax year 2013 the rate is 21%, for the tax year 2014 the rate is 20%. We are awaiting for the new tax provisions, which probably will provide for a 15% tax on Corporate Income.
However, the profits on which they are taxed are calculated with the cost-plus method and can be reduced up to the percentage of 5% on the companies' costs.
The exact percentage regarding the calculation of the profits according to the above is determined per case by a Decision of the competent Minister of Economics.
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