Tax Advantages through Reorganization, Merger / Amalgamation, and Division of Companies in Greece

The reorganization, merger, and division of companies in accordance with the Greek LLC Law and the Greek S.A. Law is rewarded by the Greek state with high tax advantages. The relevant legal provisions are found in Laws 2166/1993, 1297/1972 and 2386/1996. For example, according to Art. 3 of Law 2166/1993, no taxes or fees are levied on the transaction. According to Article 3 of Law N.1297/1972 (whose effects were extended until 30.12.2008 by Art. 25 of Law N.3427/2005!) the transfer of real estate within the framework of reorganization and merger is tax-free.

According to Article 7 of Law N.2386/1996, in order to strengthen medium-sized companies that arose from the merger of newly founded or acquiring companies of all legal forms (General Partnership, LLC, S.A.), an exemption from income tax is granted on 25% of the net profit for the first five fiscal years starting from the transfer. (The acquired company must not be an S.A. however.)

Due to this situation, it may therefore be sensible to proceed with the acquisition of an already existing company (e.g., through merger / amalgamation or division) instead of a new incorporation, and thus benefit from the cited tax advantages, and if applicable, also take advantage of further benefits through a change of legal form.

(Status: April 2010. All information is provided subject to change and without guarantee.)