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Changes to Taxation of Corporate Restructurings
The effect of Law 1297 of 1972, one of the two key tax incentive laws in Greece governing corporate restructurings, was subject to time limitations. Since the enactment of the tax incentive law in question in 1972, its effect has been subject to deadlines, which however were repeatedly extended up to 31 December 2011. Pursuant to the newly enacted Law 4072/2012, this time limitation has been abolished, with a retroactive effect as of 31 December 2011. Taxand Greece looks at abolishment of the time limitation and how businesses in Greece are likely to be affected.
Extension of the scope of tax incentive legislation
Pursuant to Law 4072/2012, the scope of tax incentive laws 1297/1972 and 2166/1993, which govern corporate restructurings, has been extended so as to cover entities engaged in the development or exploitation of real estate.
In particular, prior to the amendment, neither the regime of law 1297/1972 nor the regime of law 2166/1993 applied in the case of entities the main object of which was the development or exploitation of any type of real estate, excluding construction companies and hotels. This was with the exception of real estate investment companies regulated by the provisions of law 2778/1999. Such limitation had an anti-abuse purpose, in the sense that it deterred abusive application of real estate transfer tax exemption provisions.
According to the Introductory Report of Law 4072/2012, the scope of both tax incentive laws has now been extended for purposes of non-discrimination, as well as in order to promote the real estate market. Businesses operating in the corporate restructurings area in Greece should take a note of the abolishment of the time limit and its retroactive effect.