Return on profits for 79 sectors of the Greek economy

The Greek economy is sailing in uncharted waters, with businesses and households plagued by the energy crisis and the precision created by the war. The Greek government, although with reduced reflexes, is taking initiatives to reduce market losses and support households, but is possessed by pessimism, after a short period of recovery even in the midst of a pandemic. The next day, after the end of the pandemic support measures and with the resources now limited, is difficult and unfortunately the extent of the consequences of the war is unknown.

What is comforting in this whole situation is that last year most industries, almost all of them, recorded impressive results, gaining the lost ground of the health crisis. Specifically, 79 sectors of the Greek economy (and the subcategories that arise based on the KAD) increased their pace, covering to a significant extent the losses of 2020, according to the data of the Independent Public Revenue Authority. Specifically, out of the 87 sectors, 79 show a significant increase, 7 sectors decrease and one sector does not show any change in the declared taxable outflows in 2021 compared to last year.

In 2020 the largest negative percentage change was recorded in the housing industry, which had suffered a sharp decline due to the effects of the pandemic, while in 2021 it recovered, recording an increase in turnover of 118%. According to the AADE report, the recovery of taxable outflows in VAT returns between 2021/2020 has significantly offset the losses observed in the previous year due to the effects of the pandemic, especially in sectors that require a high degree of human contact. intensive) and freedom of movement, such as industries in the tourism industry.

The largest increase in turnover based on VAT returns

– Accommodation: Increase in turnover compared to 2020 by 118.9%

– Production of basic metals, increase of 51.7%

– Electricity, gas, steam and air conditioning supply, increase of 46.9%

– Wholesale and retail trade, repair of motor vehicles and motorcycles, increase of 22.7%

– Storage and transport support activities, increase of 20.1%

– Production of basic pharmaceutical products and pharmaceutical preparations, increase of 14.9%

– Crop and animal production, hunting and related activities, increase of 14%

– Wholesale trade, excluding trade in motor vehicles and motorcycles, increase of 14%

– Food industry, increase of 9.1%

– Retail trade, excluding trade in motor vehicles and motorcycles, increase of 8%

The industries that recorded a decrease in turnover

– Pumping of crude oil and natural gas, reduction of 71.4%

– Information service activities, decrease of 43.3%

Manufacture of motor vehicles, trailers and semi-trailers, reduction by 30.9%

Manufacture of computers, electronic and optical products, a decrease of 13.2%

– Mining of coal and lignite, reduction of 10.8%

– Insurance, reinsurance and pension funds, excluding compulsory social security, reduction of 8.2%

– Activities of libraries, archives, museums and other cultural activities, decrease of 6.3%

The draft law on mergers will be in Parliament in the coming weeks

With a long delay, but also in view of the improvement of the draft law that had been made public due to the circumstances, the government submits to the Parliament in the coming weeks the draft law on business mergers. The text that was made public provided for a 30% tax deduction for 3 years for mergers and transformations of small enterprises, provided that the partnership lasts at least 5 years, and a deduction of all expenses in case of acquisition of a company by another company.

According to information, it is being considered to give an extra bonus, and specifically to extend the 30% tax deduction on profits to five years, instead of the three provided by the relevant provision. In this way, the new businesses that will be created will be taxed at a rate of 15.5%, from 22%, while they will have access to bank lending, as for ten years, according to sources in the Ministry of Finance, they have not been able to pass the door. banks due to their low creditworthiness. It is not ruled out that the tax deduction rate may increase, which will depend on the conditions of the economy.

Today, there are about 800,000 small and medium-sized enterprises in the country, of which 95% have up to 10 employees, while only 672 large enterprises have more than 250 employees. Essentially, the government’s goal through the incentives it gives to small and medium-sized enterprises as well as freelancers, such as lawyers, accountants, architects, engineers, is for these companies to grow through mergers in order to survive, grow and become competitive.

The draft law that will be put to a vote introduces tax incentives in order to facilitate the mergers, all kinds of corporate transformations and collaborations of small and (in terms of mergers) medium-sized Greek companies, in full compliance with the corporate law for corporate transformations. The measure directly concerns small and medium-sized enterprises, and in particular, in the case of transformations, medium-sized enterprises with up to 250 employees and whose annual turnover does not exceed the amount of 50,000,000 euros. In the case of partnerships, it concerns small companies with 50 employees and an annual turnover of no more than 10,000,000 euros.

Tax reduction

In the case of a business transformation, the new company is given the incentive to be exempt from paying income tax on pre-tax profits, which arise, under tax law, by 30%, provided that the following conditions are met:

a) The total average turnover of the transformed companies, taking into account the previous three years, is at least equal to 150% of the turnover of the company with the highest average turnover of the last three years among the transformed companies.

b) The turnover of the new company, ie the sum of the turnover of the last approved and published financial statements of the transformed companies, minus the transactions between them, is equal to or greater than the amount of 450,000 euros.