What Stamp Duty Will Be Abolished – Digital Transaction Fees Are Coming

Last update: 14.14

Written by Prokopis Hadjinikoulou

The draft law, which is out for public consultation, provides for the abolition of 600 stamp duty cases. Stamp duty has been renamed transaction fees and will now be digital. After the changes, there will be 29 duty cases remaining. The changes will come into effect in early 2025.

As stated by the Minister of National Economy and Finance Kostis Hatzidakis, the old stamp duty law, which has been in place since 1931, is being simplified and the scattered provisions are being consolidated. The public will lose 32 million euros from the cancellations, while collecting around 400 million euros annually. Among those cancelled are the marriage license stamp, which currently costs 15 euros, the issuance of a building permit, which amounts to 2 percent of the project budget, divorce documents, the issuance of a professional license, which currently costs 30 euros, and the license to operate tourist offices, which costs 145 euros.

The new transaction fee will be digital and will be paid to the public through AADE in the month following the transaction date. That is, if a transaction subject to the transaction fee is made in July, the transaction fee will be paid by the end of August. It is worth noting that the four rates that exist today will remain: 0.3%, 1.2%, 2.4%, and 3.6%.

By the end of the year, a new platform will be created and the citizen will find the transaction fee that matches the case and will pay the relevant amount.

At the same time, a fee is charged on transactions where at least one of the transactors is a tax resident in Greece or has a permanent establishment in Greece. This means that loans taken abroad to avoid stamp duty are stopped. In fact, the maximum transaction fee is capped at EUR 150,000 and concerns large private loans, not bank loans.

So the new digital transaction fees announced by the financial staff:

– Replaces the current outdated frame,

– It is only imposed on contracts and transactions expressly specified by law.

– It is excluded from imposing it on transactions subject to other indirect taxes.

– It regulates many issues that were not clearly regulated by the old current framework:

a) Tax liability subject

b) Obliged to pay tax

c) tax burdened

Minister of National Economy and Finance Costis Hatzidakis He stated: “With the proposed bill, we are trying to bring another reform to the daily lives of citizens, but also to modernize the work of the public administration. We are leaving in the past, where it belongs, the current outdated framework of stamp duty dating back to 1931. We are using new technologies in order to deal with the decades-old pathologies that have caused confusion for citizens and ambiguity in the application of tax legislation positively on the pockets of citizens and companies.

Deputy Minister of National Economy and Finance Christos Dimas pointed out: “It is a measure aimed at freeing citizens, professionals, companies and the State from the bureaucratic procedures that have burdened them until now. The purpose of the regulation is to modernize the legislative enforcement framework of the transaction tax, simplify and digitize the process, rationalize the tax base for transactions, as well as reduce administrative burdens.”

Governor of the Independent Internal Revenue Authority George Pitsilis “Replacing the old stamp duty dating back to the 19th century with a modern transaction fee, which applies to specific transactions, is known in advance to the taxpayer, and is delivered digitally, is doubly beneficial for citizens and businesses. It provides legal certainty, removes the causes of uncertainty that can cause friction with the tax administration and court appeals, and at the same time saves taxpayers the hassle, as it is paid simply and quickly through a digital process. The new transaction fee is a very important step in modernising our tax system.”

Current framework problems

As the Ministry of Finance stated in its relevant announcement, the current framework for stamp duty is quite complex and often creates difficulties in implementation for traders. Some of the problems with the current framework are as follows:

– Stamp duty is imposed on contracts concluded in Greece, which makes it possible for traders who draw up the corresponding contract abroad to avoid paying it.

-The current framework also does not explicitly state the types of contracts on which it is imposed, but it generally covers all contracts that are not subject to other forms of indirect tax, resulting in a lack of legal certainty as to whether or not a contract is not subject to stamp duty.
The legal uncertainty is also compounded by the lack of clarity about who is responsible for paying stamp duty and how the declaration and payment should be made.

What changes with the new framework?

From now on, the new digital transaction fee will be imposed on transactions, regardless of where they are made, as long as at least one of the contracting parties has a tax residence or permanent establishment in Greece and there is no reason for the contracting party to be exempt. Parties. These transactions
a) expressly stated in the law,
b) Not subject to other indirect taxes.

Stamp duty cancellation

It is worth noting that with the proposed provisions, the stamp duty is abolished in more than 600 cases of transactions:

In more detail, stamp duty has been abolished on a number of important transactions such as: utility loans, insurance transactions, establishment and increase of capital of non-profit legal persons/entities, bank credits secured in favour of importers, and contractual interest on loans and credits.

In addition, it has been eliminated in more than 100 transactions involving stamps on receipts (such as marriage licenses, professional licenses, etc.). Important note: The elimination of stamp duty does not mean the elimination of tax on the transactions in question. However, it does lead to a reduction in the final burden.

It has also been abolished in more than 500 transactions where a stamp duty of 2.4% or 3.6% was imposed on reservations related to the NPDD or the State (eg, stamp reservations in favour of the National Medicines Authority (EOF), in favour of TACHDIK (Court Building Financing Fund), in favour of EADISY (Independent Public Procurement Authority)

Digital Transaction Fee Announcement and Refund

Transaction fees for transactions between individuals will be verified through an electronic announcement through a new digital platform to be operated by AADE. The fees will be announced and returned by the end of the month following the month of the transaction.

Cases where there is an obligation to withhold income tax (its accrual and payment depend on the deadlines for withholding tax), rents (paid by filing an income tax return) and current account status (declaration and declaration are made during the first month of the next tax year) are excluded.

For transactions with the State, the transaction fee is paid electronically before the relevant law is prepared or issued.

Digital Transaction Fee Factors

It is worth noting that the digital transaction fees for transactions between individuals have been clarified and specified as follows:

-3.60% on all real estate rents, on invoices for collection of compensation for legal interest and late payment interest and on transactions or contracts between natural persons who do not practice commercial activity and persons who practice commercial activity and contracting for works not related to it as well as in cases where one of the contracting parties is the State, the municipality and the NPDD.

-2.40% if all contracting parties or business partners are engaged in a commercial activity, or at least one of them has the legal form of SA, EPE, IKE.

-1.20% if it is for paying bonuses to natural persons or members of management and for depositing or withdrawing funds from legal persons and entities.

-0.30% on checks presented (“plates”) to credit institutions.

Digital transaction fees for loans, deposits and withdrawals

Loans subject to transaction fees (loans between individuals/companies that are not banks) will be subject to a transaction fee of up to EUR 150,000 per loan contract, regardless of where the loan is taken out. This removes the grounds for circumventing the legislation. The government will therefore collect the fees it has so far lost as a result of concluding the relevant contracts abroad. The burden on companies and individuals will be at reasonable levels.

In more detail, they are subject to transaction fees:

– At an interest rate of 3.6% for loans between individuals,
– At an interest rate of 2.4% for loans between natural or legal persons carrying out a commercial activity or when at least one of the contracting parties is an SA, EPE or IKE,
– 1.2% of the registration in the books of legal entities with regard to deposits and withdrawals.
– 2.4% for bond loans stipulated in Law 4548/2018 unless traded on an organized market or multilateral trading mechanism.

It should be noted that contractual interest on loans is excluded from the fees.

Find out which stamp duty will be waived on the right in the Related Files column.