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Capital gains tax Greece: Introduction of deferral for individuals and the contribution of shares08.06.2023
The recently enacted Law No. 5024/2023 is anticipated to offer a strong incentive for the establishment of holding companies in Greece. The law provides for a deferral of capital gains tax on securities transactions which meet certain conditions. At the same time, it also amends certain previously applicable VAT regulations. The new law came into effect on 24 February 2023.
The new provisions will apply to Greek tax residents who contribute domestic or foreign securities, such as shares, to cover or increase the capital of Greek or foreign legal entities or persons in exchange for securities issued by the recipient in question.
The main conditions for applying the tax deferral
- The contributor of the securities must be an individual tax resident in Greece and the sole shareholder/partner of the recipient legal entity
- The recipient must be established in a tax cooperative jurisdiction (not necessarily in the European Union)
- The scope of the recipient entity’s business objective must relate to commercial, production or agricultural activities, or the provision of services
Speak to us if we can support you with your investment plans and business start-up.Dimitrios Leventakis, Managing Partner, Certified Internal Auditor – IBFD Certified Tax Advisor, ECOVIS HELLAS Ltd., Athens, Greece
The practical effect of this amendment is that, for those cases meeting the above-mentioned criteria, capital gains taxation will only occur upon the actual transfer of the securities in question in the recipient entity that was acquired in exchange for the contribution, and not at the time of the contribution of the domestic or foreign securities, explain the Ecovis experts.
This new measure is a very welcome development that is expected to make setting up Greek holding companies an even more attractive and tax-efficient investment vehicle for high net-worth individuals.
For further information please contact:
Dimitrios Leventakis, Managing Partner, Certified Internal Auditor – IBFD Certified Tax Advisor, ECOVIS HELLAS Ltd., Athens, Greece
DORA NIS2: New changes in the law should ensure more cyber security across the EU07.06.2023
On 10 November 2022, the European Parliament passed two legal acts: The EU’s Digital Operational Resilience Act (DORA) and the Directive on measures for a high common level of cybersecurity across the Union (NIS2). EU Member States should implement the NIS2 measures from 18 October 2024, and DORA will apply directly from 17 January 2025. Both are expected to drastically change the cybersecurity landscape of the European Union (EU). ECOVIS ProventusLaw knows the details and the impact on companies.
What are the new legislations about?
The NIS2 Directive aims to create a common level of cybersecurity within the EU, repealing the current NIS Directive and creating the baseline for security requirements. NIS2 introduces standardised requirements for appropriate and proportional technical, operational, and organisational measures.
NIS2 will bring in new requirements within 3 areas: cyber strategy and governance, detection and management of security incidents, infrastructural and application security.
DORA, which is part of the digital finance package, aims to meet the growing IT security and cyber risks in the financial sector and the insurance industry. It is part of a package of measures aimed at guiding and supporting the digitalisation of the financial sector. In simple terms, under the regulatory framework of DORA, financial entities, and ICT service providers will now have to ensure that they can withstand, respond to, and recover from all types of ICT-related disruptions and threats, as well as prevent and mitigate cyber threats.
DORA introduces harmonised requirements for the security of network and information systems in financial entities in 4 main areas: ICT risk management, ICT-related incident management classification and reporting, digital operational resilience testing, managing ICT third party risks.
We can support you in correctly implementing the new DORA and NIS2 regulations in your company.Loreta Andziulytė, Attorney at Law, Partner, ECOVIS ProventusLaw, Vilnius, Lithuania
Which companies do the new changes apply to?
- NIS2: One of the most significant changes introduced with NIS2 is its extended scope. It will apply to all entities which provide their services or carry out their activities in the EU or match the description of either an “essential” or an “important” entity in a defined list of sectors: telecoms, cloud computing, managed services, data centres, banking, transport, public administration, social media platforms and search engines, postal and courier services.
- DORA: DORA will apply to a wide range of financial entities including, but not limited to, credit, payment and electronic money institutions, crypto asset service providers, insurance and reinsurance companies. The new requirements will collectively apply to 21 different categories of financial entities and IT and communications service providers, such as cloud and software providers.
What will be the consequences of non-compliance?
Under NIS2, non-compliance can lead to administrative fines and suspension of services. CEO’s and heads of legal may be temporarily prohibited from discharging their managerial functions. In the case of essential entities, the infringement of certain obligations may be subject to administrative fines of a maximum of at least EUR 10,000,000 EUR or 2% of the total worldwide annual turnover in the preceding financial year of the business to which the respective entity belongs, whichever is higher. In the case of important entities the fines can be a maximum of at least EUR 7,000,000 or 1.4 % of the total worldwide annual turnover as above.
DORA does not foresee the size or form of sanctions. However, EU member states are free to provide for sanctions and breaches of DORA in their national law.
How to prepare for NIS2 and DORA
The Ecovis advisers strongly advise that companies review the scope of both NIS2 and DORA and assess whether they will be affected. If this is the case, then preparations should begin as soon as possible.
For further information please contact:
Loreta Andziulytė, Attorney at Law, Partner, ECOVIS ProventusLaw, Vilnius, Lithuania
VAT refund Vietnam: Update on the current process06.06.2023
On 14 April 2023, a change in VAT refund in Vietnam came into effect. There are new rules regulating which refunds are possible and which documents must be submitted. The Ecovis experts summarise the most important points on VAT refunds.
The changes to the VAT refund are set out in Circular No. 13/2023/TT-BTC (Circular 13), which regulates the implementation of Decree No. 49/2022/ND-CP (Decree 49) and amends Circular No. 80/2021/TT-BTC.
The points in detail
1. Business establishments eligible for VAT refund for investment projects
Clause 3, Circular 13 totally replaces Clause 3, Article 18, Circular 219/2013/TT-BTC to ensure consistency among regulations. Accordingly, business establishments shall be entitled to VAT refund for investment projects according to the provisions of Clause 3, Article 1 of Decree 49.
In short, Decree 49 removed the requirement for the investment period to last more than a year to receive an annual VAT refund. It also allowed an investment project with conditional business to receive a VAT refund during the investment period if such investment project, as regulated by the investment and governance law, is not required, or has not yet been required to obtain a license/confirmation/approval from the competent authorities to carry out the conditional business.
2. Application for VAT refund
Circular 13 also modifies and supplements Point a.4, Clause 2, Article 28 of Circular 80 on VAT refund dossiers, including a copy of one of the licenses, certificates, or written confirmation or approval of these conditional business lines for investment projects with conditional business lines in the investment stage that have been granted licenses to engage in conditional business lines by the competent authority under the provisions of Clause 3, Article 1 of Decree 49.
Accordingly, from 14 April 2023, VAT refund dossiers for business establishments with conditional business lines will primarily include the following:
- The application form No. 01/HT
- A copy of the Investment Registration Certificate (IRC)/Investment Certificate/ Investment License in the case of mandatory IRC application
- A copy of the Land Use Right (LUR) Certificate/decision on land allocation/land leasing contract issued by a competent authority; or the Construction Permission Certificate for projects with construction works
- A copy of the license/certificate/written confirmation or approval for the conditional business lines
- A copy of the Certificate of Charter capital contribution
- A list of purchase invoices and documents according to Form No. 01-1/HT, unless the relevant electronic invoices are sent to the tax authority
- The decision on the establishment of the project management board/assignment of project management tasks by the project owner
- The organisation and operation regulations of the branch or project management board if the tax refund is applied for by the branch or project management board
For further information please contact:
Nghia Tran, Partner of Tax, Accounting and Consulting, ECOVIS AFA VIETNAM, Da Nang City, Vietnam