Societes anonymes, whose shares are listed on the Athens Stock Exchange, can capitalize, in whole or in part, the tax-free reserves of various development laws. The reserves that are capitalized are taxed at a rate of five percent (5%), without any other charge.
It should also be noted that corporations that have formed reserves, either by goodwill of shares arising from a spin-off of a branch or by a merger of companies in which it participates, or by an increase in the value of the company's holdings or by distribution of shares after capitalization of goodwill from the revaluation of fixed assets of a subsidiary or other company in which they participate, they can capitalize these reserves in order to distribute new shares to their shareholders. This capitalization is not subject to income tax.
The new regime applies to reserves that are capitalized until December 31, 2020, while especially for reserves that are capitalized from January 1, 2019 until December 31, 2019, the tax rate is set at ten percent (10%) and for reserves that are capitalized by January 1, 2020 until December 31, 2020 at twenty percent (20%).
Unlisted SA and Ltd.
Societes anonymes, whose shares are not listed on the Athens Stock Exchange, as well as limited liability companies, since they can capitalize in whole or in part, the tax-free reserves of various development laws, provided that during the fiscal year in which the capitalization takes place their share or company capital in the same amount in cash from old or new shareholders or partners. In this case, new shares or corporate shares are issued to the eligible shareholders or partners.
The capitalized reserves are taxed at a rate of ten percent (10%), without any other charge,
The tax due in both above cases is paid to the State with a statement, which must be submitted within one month from the registration in GEMI of the share / corporate capital increase and is paid in four (4) equal quarterly installments, by the which the first with the submission of the timely declaration. This tax is not deductible from the gross income of the company, when calculating the taxable profits, nor is it offset against the income tax due by the company or its shareholders or partners.
It is pointed out that in case before the lapse of ten (10) years from the capitalization of the reserves the societe anonyme is dissolved or its share capital is reduced in order to return the reserves to the shareholders, the capitalized reserves are not counted for tax as paid share capital and are taxed in accordance with the provisions in force each time for income tax at the time of dissolution or reduction of share capital after deduction of tax paid.
The above measure does not apply, however, if the company is dissolved in order to merge with another company and establish a new societe anonyme or in case of its acquisition or absorption by another societe anonyme.
On the other hand, for a limited liability company in the event that before the lapse of ten (10) years from the capitalization of the reserves this company is dissolved or its share capital is reduced in order to return the reserves to the partners, the capitalized reserves are added to the profits of the company realized at the time of liquidation or reduction of the capital and are taxed with the provisions of income taxation that are valid at the time of liquidation of the company or reduction of its share capital after deduction of the tax paid. The specific changes do not apply in case of dissolution of the company for the purpose of conversion or merger with another company for the establishment of a public limited company or another limited liability company or in case of its acquisition or absorption by a public limited company.
The above also applies to reserves that are capitalized until December 31, 2020. Especially for reserves that are capitalized from January 1, 2020 until December 31, 2020, the tax rate is set at twenty percent (20%).
After 1.1.2021, the income tax rate in force at that time applies in all cases.