Draft bill foresees incentives for investors, stock options

Apart from the reduction of the corporate income tax from 28 to 24 percent and the halving of the tax on dividends from 10 to 5 percent, the government’s draft tax bill includes a number of other incentives aimed at encouraging entrepreneurship, attracting highly skilled workers in Greece and bolstering investment activity to accelerate growth.

Therefore, beside the changes to tax rates and obliging taxpayers to conduct more online transactions, which have been at the focus of attention, it also contains a series of clauses addressing the investor community.

These include the introduction of separate tax for stock options – which is the right to buying shares in one’s employer, a common reward for corporate executives – of 15 percent. Stock options are currnelt taxed as revenues from salaried services based on income tax, often taking the tax up to 45 percent. This clause offers a motivation for new technology companies to attract skilled employees and grow, considering there are incentives both for employers and employees, government officials say.

Tax on real estate investment companies is also being reduced considerably: So far, they were taxed with a 0.75 percent annual rate on their assets, but from now on they will be taxed on 10 percent of the Euribor rate plus one percentage point on the average amount of their investments. A similar regulations on a tax rate associated to the Euribor is provided for mutual fund management companies, in order to avert their departure to other countries such as Luxembourg.

The bill contains incentives for non-permanent residents (Non Dom) to shift their tax domicile to Greece: For that they would need to invest over 500,000 euros in this country and get taxed at a flat rate of 100,000 euros plus another 20,000 euros per family member, regardless of their global income. The government believes this concerns a small number of very wealthy citizens and could interest Greeks abroad, such as London-based shipowners.

Finally, there is also a clause on corporate social responsibility spending that grants firms breaks in this type of expenditure.