New Tax Incentives for Corporate Transformations – Provisions of Circular E.2088/2025

The Independent Authority for Public Revenue (IAPR) issued Circular E.2088/2025 on October 10, 2025, providing detailed guidelines for the implementation of the provisions of Part D of Law 5162/2024 (A΄198), which concern the new tax incentives for corporate transformations.

This circular holds particular significance for businesses in Greece and abroad, as it introduces favorable tax regulations for mergers, demergers, and other forms of transformations.

For the first time, the new framework permits the application of these incentives to cross-border transformations — for instance, in cases of contribution of a branch or exchange of shares between companies established in different EU member states.

The basic prerequisite is the existence of tax residence, ensuring that there is no transfer of profits or artificial tax exemption.

It should be noted that the above provisions apply to transformations for which the plan or decision was published before December 5, 2024 (i.e., before the entry into force of Law 5162/2024), and which had not been completed by that date, provided that a new plan is drafted or a new decision is taken by the competent corporate body after the entry into force of Law 5162/2024, specifically from December 6, 2024 onwards.

Cross-Border Mergers, Demergers & Conversions: Scope of Law 5162/2024

The circular covers the provisions of Articles 47–56, 58 and 59 of Law 5162/2024, which provide tax incentives for:

• National & cross-border mergers and demergers.

• Transfer of the registered office of a European Company (S.E.) or European Cooperative Society (S.C.E.) from Greece to another EU member state and vice versa.

• Exchanges of corporate shares.

• Conversions of companies.

• Transformations between domestic companies.

• Contribution of a sole proprietorship or joint venture.

Exemptions and Tax Neutrality: The Key Incentives of Law 5162/2024

The provisions of Law 5162/2024 provide significant benefits under certain conditions, such as:

• Exemption from capital gains tax for asset transfers during transformations.

• Exemption from Real Estate Transfer Tax (RETT).

• Transfer of tax losses, reserves, and provisions to the new corporate entity.

• Accounting for depreciation of contributed fixed assets without interruption.

• Exemptions from capital concentration tax, stamp duty, and other fees.

The Anti-Abuse Clause: Documenting Business Rationale for Tax Compliance

Circular E.2088/2025 places particular emphasis on the prevention of abuse. If the transformation is carried out exclusively for tax reasons, without genuine business justification, the tax benefits may be revoked by the tax authority.

It is therefore crucial that every transformation plan is fully and adequately documented regarding its business benefits, economic rationale, and viability.

Checklist for Companies: Key Steps Before a Corporate Transformation

Prior to any transformation, companies must carefully consider:

• Whether their legal form and the type of transformation fall under the provisions of Law 5162/2024.

• Whether the prerequisites for ensuring tax neutrality are met.

• And whether the draft agreement expressly states the submission to the relevant provisions.

Timely tax and legal preparation ensures that the process will be completed without risks or delays.

A Stable Framework for Growth

With the new regime, Greece acquires a modern and cohesive framework for transformations, harmonized with European law.

The implementation of the provisions of Law 5162/2024 and Circular E.2088/2025 is expected to facilitate businesses in Greece and abroad to proceed with strategic transformations with favorable tax consequences.

Especially for international investors and businesses operating in more than one EU country, the new regulations offer flexibility and tax consistency. This is a significant opportunity for restructuring and growth for companies looking to enhance their size, attract investors, or expand into new markets.

The TaxExperts team supports businesses and investors across the entire spectrum of transformations, from selecting the appropriate structure and tax documentation to the implementation and monitoring of the new corporate entity.

For more information or to request an assessment of your corporate transformation under Law 5162/2024, please contact our team via email at: newsroom@taxexperts.gr.