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Introduction of Special Duty on Buildings Powered by Electricity
In an effort to meet the State's deficit goals and achieve an immediate increase in public revenue, the Government, by means of an amendment to a bill brought before parliament, introduced a new property tax called "Special Duty on buildings powered by electricity". Pursuant to the aforesaid amendment, the Special Duty will be imposed in 2011 and 2012 on all buildings connected to the electricity system, either commercial or residential, which have been subject to another similar duty since 1993, namely the Municipal Real Estate Duty.
It is noted though that, according to the latest information released in the press, the levy of the Special Duty will be extended to 2014. Taxand Greece looks at the conditions of the Special Duty in more detail.
The Special Duty shall be borne by the owner(s) of the building or by the holder(s) of usufruct rights, as the case may be. The Special Duty shall be paid to the Greek State through the utility bills issued by electricity providers. With respect to leased buildings, the Special Duty will still burden the lessor, whilst any agreement to the contrary between the lessor and the lessee is explicitly prohibited. Therefore, lessees will pay the Special Duty to the Greek State through the corresponding utility bill but they will be entitled to set off said amount against the future monthly rental(s) due to the lessor.
The Special Duty is calculated on the basis of a similar method used for the calculation of the Municipal Real Estate Duty mentioned above. More specifically, it is calculated on the total surface of the building with a levy ranging from EUR 0.50 to EUR 16 per square meter depending on the location and other factors. The age of the building is also taken into account. In particular, the aforesaid rates may be further increased from 5 per cent (for buildings constructed 20 to 25 years ago) to a marginal 25 per cent (for buildings constructed within the last 4 years).
There are various exemptions from the Special Duty including (but not limited to) buildings owned by charitable legal entities, sports clubs, certain religious organisations, as well as the Greek State. In addition, there is a provision for the levy of EUR 0.50 for specific individuals, such as unemployed persons but on specific conditions. Finally, for income tax purposes, the Special Duty may be deducted from the gross revenues of enterprises.
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