Tax Advantages through the Transformation, Merger and Division of Companies in Greece
Greek legislation has long favoured the transformation, merger and division of companies with special tax advantages. The former body of rules – which had grown over decades and was heavily fragmented (including Legislative Decree 1297/1972, Articles 1–4 of Law 2166/1993, Chapter A of Law 2578/1998, and Articles 52–56 of the Income Tax Code, Law 4172/2013) – was fundamentally reformed and consolidated into a single body of rules by Law 5162/2024 (Part D, Articles 47–56 and 58–59 of Law 5162/2024). The new provisions apply to merger and division agreements, and to transformation resolutions, published since their entry into force on 5 December 2024; transformation transactions already commenced beforehand are still completed under the law previously applicable to them.
The new law covers mergers, divisions, transformations (changes of legal form) and share exchanges – both at national and cross-border level – and at the same time implements the EU Merger Directive (Directive 2009/133/EC) in conjunction with the general company-law framework for transformations under Law 4601/2019. The central tax advantages include in particular:
- the tax-neutral transfer of assets in the course of the transformation, without immediately triggering taxation of hidden reserves (increases in value),
- the possibility for the acquiring company to continue the transferring company’s tax reserves and provisions under the conditions previously applicable to them,
- the exemption of certain legal transactions connected with the transformation from taxes and fees.
The law also contains an anti-abuse clause: where the transformation does not pursue an economically comprehensible purpose but essentially serves tax avoidance, the tax authority may refuse the advantages granted. An accompanying application directive of the Greek tax authority AADE (Circular Ε.2088/2025) sets out the practical application of the new provisions in more detail.
Against this background, it may still be worthwhile to consider acquiring an already existing company – for example by way of merger, division or transformation – instead of a new formation, in order to benefit from the tax advantages described and, where appropriate, at the same time to carry out a change of company form advantageous to the business. Given the complexity of the subject, early tax and company-law advice is recommended in every case.
FAQ
The relevant tax-relief rules continue to be found in particular in Laws 2166/1993, 1297/1972 and 2386/1996, whose continued validity was expressly confirmed by Law 4601/2019. In addition, the Income Tax Code (Law 4172/2013, Articles 52–55) also contains its own rules on the tax-neutral treatment of certain transformations falling within the scope of the EU Merger Directive.
Under Art. 3 of Law 2166/1993, no taxes or fees are levied on the transactions covered by the transformation. The precise scope of this exemption should be checked for the specific type of transaction in each individual case.
Under Art. 3 of Law 1297/1972, the transfer of real property in the course of a transformation or merger is, among other things, exempt from tax. This exemption continues to apply under current law; the extension referred to in the original text, which was at the time limited until 30 December 2008, is obsolete and no longer relevant to the current legal position – for up-to-date details, we nonetheless recommend checking the currently applicable version of the law.
Under Art. 7 of Law 2386/1996, in order to strengthen medium-sized enterprises formed by merger (whether newly formed or acquiring companies of any company form – partnership, GmbH, AG), an exemption from income tax on 25% of net profit is granted for the first five financial years following the transfer. The acquired company may not, in this context, be an AG.
It can be worthwhile to acquire an existing company by way of merger or division, rather than forming a new one, in order to obtain the tax advantages described. In addition, further advantages may be available by changing the company's legal form.
As of June 2026. All information on these pages is provided without guarantee or liability.