Article 10
STATE PARTICIPATION IN GRANT-AIDED UNDERTAKINGS AND TRANSFER OF THE STATEÕS RIGHTS
The rights of the State deriving from participation in an investment which has been made subject to the provisions of Law 1262/82 and Law 1892/90 may be transferred by joint decisions of the Ministers of National Economy and of Finance to investment banks. Similar decisions shall stipulate the relations between the State and such banks, the manner of participation and all matters in general pertaining to such participation, subject to the implementation of the provisions of Commercial Law.
INTEREST SUBSIDY
Article 11
CONTENT AND EXTENT OF THE INCENTIVE
1 Investments which have been made eligible for the system of grants provided under this law are entitled to a subsidy of the interest rate applied at any one time for medium- and long-term bank loans, bond issues made available for public subscription or loans extended by other financing organisations, provided such loans have been contracted for the purpose of realizing the said investment. The percentage of subsidy is equal to the percentage of grant which was approved and is provided as of the drawing of instalments of the loan and for a maximum period of 4 years, except in the case of investments in Area D which are carried out in the special zones of article 3, par. 3, and the investments of instance (a) of par. 1, article 9 which are carried out in Areas A, B, C and D, for which the interest subsidy is provided for up to a maximum of 6 years. In the event of capitalization of the interest corresponding to the period of grace, the subsidy shall be disbursed to the lending bank to reduce the loan arising from the capitalization.
For the purpose of calculating the subsidized bank loan, the value of the land is not taken into consideration. The interest rate subsidy is provided on the condition that the interest rate is not being subsidized from some other source.
By way of exception, in the case of medium- and long-term loans to craft industry and agricultural undertakings which are subsidized to the debit of the joint account of Law 128/1975 (Government Gazette 178/A/75) in accordance with the relevant ministerial decisions, the interest subsidy of the present law is provided for the amount of the difference arising.
In the case of investments carried out in the Prefectures of Evros, Rodopi and Xanthi, the interest subsidy shall be provided as for the drawing of instalments of the loan and up to a maximum of 10 years.
2 Before an interest subsidy can be paid, the decision confirming completion of the investment and the decision certifying commencement of its productive operation must first have been issued and the terms of the act of approval must have been adhered to.
3 The amount of interest subsidy received by the undertaking reduces the amount of debit interest that is deducted from the taxable gross profits of the undertaking for the purpose of calculating the taxable net profits.
4 The interest subsidy is not granted in cases where the investment has been made eligible for the incentive of tax allowances.
5 Undertakings whose investments are made eligible for a grant under the provisions of the present law which do not make use of the maximum permitted lending (in accordance with the decision of approval), shall be entitled to an amount equal to the interest subsidy for that part of the loan which they forgo. The procedure and method of granting the subsidy will be determined by decision of the National Economy Minister.
6 The interest rate on the balance of loans of shipping companies of popular (ŌlaikiÕ) basis are entitled to a subsidy of up to 8 percentage points for 4 years provided such companies have purchased and refitted a vessel in order to replace another which was lost at sea and on the condition that no investment of the company has in the past been made eligible for the provisions of a development law. The procedure and method of granting the subsidy will be determined by decision of the National Economy Minister.
TAX ALLOWANCES
Article 12
CONTENT AND EXTENT OF THE INCENTIVE
1 Tax allowances are provided on the net profits subject to income tax of the companies of article 2 of this law, which are either already established, relocate or establish themselves for the first time in Areas B, C, D and Thrace of article 3 of the present law, provided they carry out new productive investments, in accordance with article 1 of the present law, prior to 31.12.2004.
2 The percentage of tax allowances on the value of new productive investments effected since 1-7-90, as well as the maximum percentage of annual net profits on which the tax allowance may apply, increase by area as follows:
a. For all categories of investments
(except those listed in [b] below):
Area Tax allowance (%) of as (%) of annual profits investment cost on which tax allowance may apply A - - B 60 60 C 75 75 D 90 90 THRACE 100 100
b. Investments by hotel undertakings and guest houses:
Area Tax allowance (%) of as (%) of annual profits investment cost on which tax allowance may apply A - - B 40 60 C 55 75 D 70 90 THRACE 100 100
3 In the event that the investment or a part of the investment has received a grant, that investment is not entitled to tax allowances.
4 Investments carried out in the ETBA Industrial Estate of the Prefecture of Thessaloniki are entitled to the tax allowances applicable for investments in Area B.
– Investments carried out in ETBA Industrial Estates of Areas B, C and D are entitled to the tax allowances applicable for investments in Areas C, D and Thrace respectively.
5 Undertakings under instance (c) of paragraph 1, article 2 of the present law, which carry out investments in Area B, are entitled to the tax allowances normally applicable for Area C.
– Undertakings of article 2 which carry out, in Area A, investments under (a), (b), (c), (d) and (e) of paragraph 1, article 9, as well as undertakings under (v) of paragraph 1, article 2 which carry out investments in Area A, are entitled to the tax allowances normally applicable for Area C. The same investments effected in Areas B and C are entitled to the tax allowances applicable for Areas C and D respectively.
– Technical firms under (x), irrespective of the area in which they are based, are entitled to the tax allowances applicable for Area B.
– Undertakings under (u) of paragraph 1, article 2 and hotel undertakings, which effect investments under (o), (p) and (q) of paragraph 1, article 1 in any area (except Area A), are entitled to the tax allowances of Area C under instance (a) of paragraph 2 of this article.
The same benefit is granted also to undertakings of instance (n) of paragraph 1, article 2, which carry out investments in any area (except Area A). When the above investments are effected in Thrace, they are entitled to the tax allowances of that area.
– Hotel undertakings carrying out investments involving the establishment or expansion of deluxe or A class hotels or hotels catering for therapeutic, sports or winter tourism in Areas B and C, are entitled to the tax allowances of Area D under instance (b) of paragraph 2 of this article.
6 Processing undertakings of instance (a) of paragraph 1, article 2 which are established in Area A and carry out investments involving the modernization of their production equipment, are entitled to the tax allowances of Area B subject to the following conditions:
a. The investments concern exclusively the modernization of production equipment pursuant to the provisions of Presidential Decree 84/84 (Government Gazette 33/A/84) or other restrictive provisions pertaining to the establishment/expansion etc. of industries and craft industries in Area A.
b. The equipment installed must be of modern technology.
c. The investment must not cause additional pollution of the environment in relation to the existing situation.
d. Undertakings may be made eligible for the tax allowance incentives only after 3 years have passed since the completion of an earlier investment involving the modernization of the same production unit which was made eligible for the benefits of this incentive or for the incentive of investment grant and interest subsidy.
The fulfilment of the above conditions shall be verified by a Committee operating at the General Secretariat for Industry which shall issue the relevant certificate. The supporting documents and details which must be submitted to the General Secretariat for Industry for the purpose of implementing this provision shall be determined by joint decision of the Ministers of National Economy and of Industry, Energy and Technology.
Article 13
PREREQUISITES FOR TAX ALLOWANCES
1 Tax allowances under the preceding article shall be subject to the following conditions: p> a. They shall be computed on the net profits declared in the initial income tax return, which profits originate from the activities of the undertakings concerned after deductions for the formation of ordinary reserves and profits of the financial year which are distributed or withdrawn by the partners or entrepreneur.
b. They shall be applied with respect to the profits earned in the accounting year during which the investment was carried out. If no profits are recorded in the said year or if the profits realized are not sufficient, the tax allowance shall be applied with respect to the profits earned in the immediately following accounting years until the percentages on the value of the investments, as stipulated in the preceding article, are reached. Should an undertaking in any accounting year fail for any reason to apply, in whole or in part, investment tax allowances to the accounting differences declared in the initial income tax return, it shall not be deprived of the right to apply tax allowances to the profits of subsequent accounting years with regard to the sum of the investment on which the undertaking failed to apply tax allowances in the accounting year in question.
c. They shall be entered in the form of a tax-free reserve in separate accounts in the undertakingÕs books.
d. The undertaking must keep Category C account books.
e. In the case of industrial installations and buildings under construction, work on which continues for more than one accounting period, tax allowances may be applied on the profits of each accounting period with respect to the construction expenditures incurred each year, on the condition that the investment will be completed within five years from its date of commencement.
2 In the case of undertakings keeping Category A or B books of the Code of Taxation Documents, the tax allowances shall be applied to the net profits declared in the initial tax return after deduction of withdrawals.
3 In the case of undertakings engaged in several activities, the tax allowances shall be applied to the net profits originating from those activities of the undertaking which are subject to this law, irrespective of the area in which the activities are being conducted. If the various profits cannot be determined by accounting procedures, the undertakingÕs total profits shall be broken down on the basis of the gross income from each activity.
4 The supporting documents to be submitted by the investor, the data required for checking the size of the investment and the time over which the tax allowance should be applied, as well as the additional books to be produced by undertakings keeping books of Category A, B and C of the Code of Taxation Documents shall be prescribed by joint decisions of the Ministers of National Economy and of Finance. Similar decisions shall also stipulate the checking procedures for the investments and the statistical monitoring of undertakings taking advantage of the tax allowances under the present law.
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