The new legislation on Digital Transaction Fee: Key reforms introduced

On 13/09/2024 the Parliament enacted the new legislative framework on Digital Transaction Fee.

The main reforms and goals of the new legislation

• The purpose of the new legislative initiative is to introduce a transaction fee that will be predictable and transparent.
• The new law abolishes and replaces the former Stamp Duty Code (“S.D.C.”), which was in force since 1931, given that its outdated provisions could no longer serve the needs of the modern transactional and business environment.
• The stamp duty was only imposed on written agreement, concluded within Greece, thus, rendering the form of the agreement or the transaction rather than its nature and scope crucial for the purposes of stamp duty.
• The introduction of the Digital Transaction Fee is a milestone in the Recovery and Resilience Plan for our country's financial and social restructuring.
• The new law seeks to impose a uniform tax on transactions, agreements and acts, restrictively provided thereunder, which are not subject to other indirect taxes.
• The new law regulates many issues that the antiquated framework of the S.D.C. had not previously clearly regulated, such as, indicatively, the subject of the tax liability, the person who is liable to remit the fee as well as the person who bears the financial burden.
• The Digital Transaction Fee applies on transactions and agreements which are carried out or concluded as of 1st December 2024 onwards.

Key points of the new law

• The Digital Transaction Fee is imposed on transactions where at least one of the parties involved is a Greek tax resident or has a permanent establishment in Greece, as provided under the Income Tax Code. It thus abolishes the concept of territoriality according to the former provisions of the S.D.C..
• Stamp duty is now abolished in a number of significant transactions, such as gratuitous loans, insurance transactions, payment of contractual interests on loans and credits as well as bank letters of credit for importers.
• A Digital Transaction Fee cap of €150k per loan agreement is imposed.
• Bond loans concluded under the Law 4548/2018 are exempt from the Digital Transaction Fee.
• The transactions on which the Digital Transaction Fee applies are now specified under the law, while, there are four rates, 3.60%, 2.40%, 1.20% and 0.30%.
• Settlement Agreements are subject to the Digital Transaction Fee, calculated on the agreed amount and not on the initially claimed amount, as it was formerly provided under the S.D.C..
• No Digital Transaction Fee is levied on the fees which are paid by way of profit’s distribution to the Société Anonyme (SA) Board of Directors’ members, Limited Liability Companies’ and Private Companies’ directors.
• Ancillary and supplementary agreements which are concluded by way of securing the main agreement, as well as penalty clauses, are subject to the Digital Transaction Fee, unless the main agreement is exempt or falls out of the law’s scope or the Digital Transaction Fee, which applies on the main agreement, has been remitted.
• In case of ancillary agreements and penalty clauses, any amount paid as Digital Transaction Fee on the main agreement shall be deducted.
• From a compliance perspective, a uniform deadline for the return’s submission and the fee’s remittance is introduced by the end of the month following the month in which the transactions have been carried out, including all of them and their total financial value.

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