Greece Moves to Ease Tax Burden on Non-Profits Amid Legal Ambiguities

10:33 16/2/2025 - Πηγή: Dikaiologitika

A new legislative initiative is set to tackle the legal hurdles that threaten the financial sustainability of non-profit organizations in Greece. The Finance Ministry plans to introduce reforms in parliament by March, focusing on the taxation framework that has long disadvantaged the sector.

At

the heart of the issue is the taxation of non-profits, which, under a 2013 law's interpretation by the tax authority, are subjected to heavier taxes than for-profit businesses and individuals. Currently, foundations and NGOs face a 22% tax on income from assets such as rent, interest, and dividends—on par with the tax on undistributed corporate profits.

In contrast, individuals earning dividends pay just 5%. Moreover, non-profits are barred from deducting operating expenses, including salaries, from their taxable revenue.
Although the law stipulates that income generated in pursuit of a non-profit’s mission should be tax-exempt, conflicting interpretations have led to excessive taxation. A recent report by the Bodossaki Foundation highlights cases where some organizations are taxed at 22% on their total revenue from property and investments. Experts argue that non-profits with a purely public-benefit mission and transparent governance should be exempt from such levies.

Beyond direct taxation, additional financial disincentives hinder non-profit funding. A 0.5% tax on donations—initially proposed for swift removal—remains in effect, often burdening donors rather than recipients. Until 2014, in-kind donations were also subject to a 23% VAT, discouraging contributions. Furthermore, corporate social responsibility (CSR) tax deductions do not extend to charitable donations, prompting some Greek foundations to establish financial trusts abroad.

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