Greek Government Proposes Minimum Tax on Multinational Enterprises and Large-Scale Groups

The Greek government presented a draft law on Tuesday to incorporate a European directive into national legislation. This directive aims to impose a minimum tax rate on multinational enterprises and large-scale domestic groups, potentially resulting in an additional tax of up to 15% on profits.

The directive, known as Pillar II (EU 2022/2523), is a significant step towards addressing the issue of tax avoidance and unfair tax competition globally. It establishes a global minimum tax rate of 15% for multinational enterprises and large-scale groups. So far, 132 countries have adopted this system, and it will be mandatory for EU member-states from January 1, 2024.

In Greece, based on 2022 data, there are 19 Greek groups and 900-950 subsidiaries of foreign groups with a combined turnover of at least 750 million euros for two out of the four years preceding 2024. The corporate tax rate in Greece currently stands at 22%. The implementation of the EU directive is not expected to lead to foreign business groups leaving the country. The introduction of the new legislation is estimated to generate additional tax revenue of around 80 million euros.

The draft law was presented during a cabinet meeting by National Economy and Finance Minister Kostis Hatzidakis and Deputy Minister Harry Theoharis.

Hatzidakis stated, “Our country is incorporating a European directive that introduces a supplementary tax of up to 15% on multinational enterprises and large-scale groups that pay lower taxes due to unfair tax competition. Supporting business activity is a consistent policy of the government, along with efforts to attract investments. However, this should be distinguished from attempts to avoid taxes. The European Union seeks to address these practices, and Greece is implementing this directive not only due to institutional obligations but also for the sake of tax justice.”