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K. Kollias: ‘Small and medium-sized enterprises must be supported by the State’

The need for small and medium enterprises to be supported by the State was underlined by the President of the Economic Chamber of Greece, Konstantinos Kollias.

Speaking to the Standing Committee on Economic Affairs of the Parliament on the bill of the Ministry of Finance, entitled, “Incentives for business development, through partnerships and corporate transformations”, Mr. Kollias stressed that it is in the right direction, as “providing incentives for corporate transformation of small and medium-sized enterprises is a rational approach “.

He referred to specific provisions, and focused on the following:

• In Article 3, the 30% tax deduction on profits is extremely encouraging. However, in the conditions, and especially in (a) dealing with the total turnover of the transformed companies, where it should be at least 150% of the turnover of the company with the largest turnover, it should be considered and there should be ratings according to turnover. To be clear, a medium-sized business with an annual turnover of around € 10 million will not be able to benefit from tax incentives if it absorbs a small, innovative business with a low turnover.

• Article 4 correctly extends tax incentives to cases of personal partnerships. It is equally important that in the conditions there are divorce criteria, since it would not be easy to adopt all.

• It is important to provide in Article 5 of the contribution of a small sole proprietorship in any form of Legal Entity. In this case the new scheme will have an Income Tax exemption of 30%, as in the previous case but we will also have the retention of administrative licenses in Article 8. It is proposed in this case the sole proprietorship in addition to the transfer of all contractual obligations, to maintain in force the contracts of employment programs OAED etc. or NSRF programs etc.

• Equally important, is that it is exempt from income tax, the income resulting from the goodwill of transferring data of the new company to a third party, under certain conditions (Article 7).

• Article 9 of the draft law is extremely important because it provides tax incentives similar to those of Legislative Decree 1297/72 and articles 1-5 of Law 2166/1993 and stronger than those provided in articles 52-55 of the tax code income (Law 4172/2013). Of course, there is no explicit report on income tax exemption regarding the transfer of existing tax-free reserve development laws, something that is also mentioned in the N.D. 1297/1972 (article 10), in Law 2166/1993 (article 3) and in Law 4172/2013 (article 54).

• The provision in article 11, which concerns the transfer of losses from the transformed companies to the balance sheet of the new company and the possibility of tax offset with the profits of the new company, is extremely important. According to the 2019 tax returns of legal entities by AADE, more than 6 out of 10 companies showed a loss or zero profits. Through partnerships and partnerships, these companies are given the opportunity to finance and turn them into sustainable.

Finally, Article 15 provides natural persons, mainly farmers, with an income tax exemption of 50% on profits from income from agricultural business, further strengthening farmers in these difficult economic times.

Source: Capital

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