By Dimitra Gkanatsiou

The Law 4935/2022 entitled “Incentives for business development through partnerships and corporate transformations and other provisions” was published in Government Gazette 103/A/26-5-2022.

The purpose of the legislative initiative is to provide significant and innovative incentives for the creation of economies of scale through transformations of very small, small and medium-sized enterprises and partnerships of persons, for all sectors of economic activity.

The incentives concern all forms of transformation, including the case of contribution of a sole proprietorship to any form of company, as well as partnerships of persons, either in the form of binding agreements or joint establishment of new companies.

In particular, the incentive of 30% exemption from payment of income tax on the taxable profits of the new company or the cooperating person is provided. In the case of partnerships of natural persons who are professional farmers, this exemption amounts to 50%.

It should be noted that the exemption is granted subject to specific conditions regarding the turnover and size of the transformed companies (micro, small and medium-sized enterprises are covered), while a maximum period for which the benefit is granted (nine years), a ceiling on the total benefit in the case of transformation or cooperation and exceptions, such as for construction joint ventures, are set.

Moreover, article 24 contains a provision for the payment of the Uniform Property Ownership Tax in up to ten (10) equal monthly instalments, each of which may not be less than ten (10) euros. The first instalment shall be paid by the last working day of the month in which the tax assessment act is issued.