Greece 2025–2026 Tax Reforms: What Business Owners Need to Know
Major changes to income tax brackets, corporate incentives, and VAT rules under Law 5246/2025. Here's how they affect your business.
Greece's tax landscape is undergoing its most significant transformation in years. Law 5246/2025, passed in November 2025 (Government Gazette A' 198/11-11-2025), introduces sweeping changes to income tax brackets, corporate taxation, and VAT rules that will reshape how businesses and individuals plan their finances through 2026 and beyond.
New Income Tax Brackets (Effective 2025)
The most impactful change for individuals and sole proprietors is the restructured income tax scale. The new progressive brackets are:
| Annual Income | Tax Rate |
|---|---|
| Up to €10,000 | 9% |
| €10,001 – €20,000 | 22% |
| €20,001 – €30,000 | 28% |
| €30,001 – €40,000 | 36% |
| Over €40,000 | 44% |
A key development is the increase of the tax-free threshold. The government has raised the basic tax-free allowance, providing meaningful relief to lower-income taxpayers and small business owners. Combined with the solidarity contribution (εισφορά αλληλεγγύης) remaining suspended, the effective tax burden on middle-income earners has decreased.
Corporate Tax Updates
The corporate income tax rate remains at 22%, but several new incentives have been introduced:
- R&D Super Deduction: Companies can now SMEs whose R&D exceeds 20% of total expenses can deduct up to 200% (Law 5162/2024). The general super-deduction remains at 150%. This applies to both in-house R&D and contracted research with Greek universities.
- Green Investment Credits: New tax credits for investments in renewable energy, energy efficiency upgrades, and sustainable business practices. Credits range from 10% to 30% of the investment amount.
- Digital Transformation Incentive: SMEs investing in digital infrastructure (ERP systems, e-commerce platforms, cybersecurity) can claim an enhanced deduction of 150% of costs.
- Startup Tax Holiday: Qualifying innovative startups registered after January 2025 may benefit from a reduced 10% corporate tax rate for their first three profitable years.
VAT Changes
Several VAT adjustments took effect:
- The reduced VAT rate of 13% has been extended to cover additional categories of essential goods and services, including certain food products and public transport.
- Construction VAT: The temporary suspension of VAT on new residential construction has been extended through December 2026 for properties under 200 m² in areas with demonstrated housing shortages.
- Digital Services: Clarified rules for VAT on cross-border digital services align Greek law with the latest EU VAT Directive amendments.
Freelancer & Self-Employed Changes
Self-employed professionals (ελεύθεροι επαγγελματίες) should note:
- The prepayment of tax (προκαταβολή φόρου) has been reduced from 100% to 80% for freelancers in their first five years of operation, easing cash flow pressure on new businesses.
- Simplified bookkeeping thresholds have been raised: businesses with annual revenue under €150,000 (up from €100,000) can maintain simplified records.
- New provisions for the gig economy: Platform workers receiving income through digital platforms now have clearer tax obligations and may opt into a simplified flat-rate expense deduction.
Key Deadlines & Compliance
Business owners should mark these dates:
- March 2026: Mandatory B2B e-invoicing through myDATA for all businesses (see our myDATA compliance guide)
- June 2026: Filing deadline for 2025 corporate tax returns under the new regime
- Quarterly VAT: Businesses with turnover under €800,000 can now file VAT quarterly instead of monthly
What Should You Do Now?
These reforms create both opportunities and obligations. We recommend:
- Review your tax structure — Sole proprietors earning over €30,000 should evaluate whether incorporating offers advantages under the new bracket/corporate rate differential.
- Claim available incentives — Many of the new deductions and credits require pre-approval or documentation. Start the application process early.
- Update your accounting systems — Ensure your bookkeeping software is compliant with the new myDATA requirements and simplified bookkeeping thresholds.
- Consult a professional — Tax planning under the new regime requires careful analysis of your specific situation.
At Apostolou & Partners, we're helping clients across Greece navigate these changes. Contact us for a personalized tax planning consultation.