German corporations pay an effective corporate tax rate of approximately 30%, depending on the municipality (federal tax plus trade tax). US corporations pay 21% federal corporate income tax, with state and local taxes varying by state. Greek corporations pay 22%. But for qualifying investments under the Development Law — L.4887/2022, as amended by L.5203/2025 (Government Gazette A’ 87/02.06.2025) and L.5297/2026 (Government Gazette A’ 64/28.04.2026) — that 22% can drop to zero in a given year, through an approved amount of tax that is lawfully never paid, usable over up to 15 tax years. The “15-year tax exemption” is therefore a capped, approved amount of aid — not a guarantee of fifteen years of zero tax. This is not a rumour or a grey-area structure. It is the tax exemption form of aid as written in Greek law, subject to the applicable EU State-aid framework (including the GBER where relevant), and applied through a defined Ministry approval process.
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ToggleWhat the 15-Year Tax Exemption Is and How L.5203/2025 Enables It
Article 9 of L.4887/2022, as amended, provides the tax exemption as one of the forms of aid available under the Development Law’s aid schemes, alongside the cash grant, the leasing subsidy, the wage-cost subsidy and, where expressly provided by the specific scheme, risk-finance support. The exemption consists in the non-payment of corporate income tax on pre-tax profits arising, under Greek tax law, from all the activities of the company — after deducting the tax that corresponds to profits distributed or withdrawn by the shareholders or partners. The approved amount of the exemption is calculated as a percentage of the eligible aided expenditure of the investment project (or the value of new equipment acquired through leasing), and it forms an equal special reserve, kept in a distinct account in the company’s financial statements.
The right to begin using the benefit is founded when the competent authority certifies implementation of 50% or 65% of the investment project’s cost. From the year that right is founded, the approved amount may be used within a period of up to 15 tax years — it can be exhausted earlier, or not fully absorbed if profits prove insufficient. As a rule, the amount used in any single tax year may not exceed 50% of the total approved exemption, and — until the decision certifying completion and start of production operations is issued — total utilisation may likewise not exceed 50% of the approved amount; amounts not used because of insufficient profits are carried forward within the 15-year window. The benefit is claimed through the annual corporate income tax return filed with AADE (the Greek tax authority), accompanied by the Tax Exemption Declaration submitted through the Development Law Information System (PS-An), and the data are cross-checked; the equal special reserve is shown in a distinct account, and compliance is monitored throughout the utilisation period — a discipline addressed in the Remediation & Decision stage of the 360° Protocol.
Who Qualifies for the Full 15-Year Exemption
Eligibility depends on the specific aid scheme and its applicable call — the scheme, the applicant entity, the activity code (KAD), the initial-investment character, the budget, the region, the enterprise size and the statutory exclusions all matter. The key factors typically examined are:
- Own contribution: At least 25% of the aided cost of the investment must be financed by the investor without any form of State aid, public support or other public contribution.
- Investment threshold: The total eligible investment cost must meet the minimum threshold for the applicable scheme. Confirmed during eligibility assessment.
- Sector eligibility: The available aid forms and eligible activities depend on the specific aid scheme and its applicable call. Indicatively: manufacturing, tourism, renewable energy, technology, logistics, agri-food. Excluded sectors and activities are listed in the law and in each call.
- Legal entity: The applicant must have an establishment or an eligible branch in Greece and fall within the legal forms provided for in Article 13 of the law and the applicable call. The aid is granted to that eligible entity, and the exemption is applied at its level.
- Job creation conditions: Some scheme variants require the creation of a minimum number of new full-time equivalent employment positions. This is project-specific and confirmed during eligibility assessment.
The region, the size of the enterprise and the applicable scheme shape the amount and intensity of the aid — the 15-tax-year window for using the approved amount is set by the law itself.
How the Exemption Works in Practice — Illustrative Scenario
Note: The following is illustrative only and does not constitute tax or legal advice. Actual tax outcomes depend on specific project structure, applicable law, and professional tax counsel.
| Period | Annual Taxable Profit Before Corporate Income Tax (Illustrative) | Without Exemption (22% tax) | With 15-Year Exemption | Annual Saving (Up To) |
|---|---|---|---|---|
| Years 1–5 | €300,000 | €66,000 | Potentially €0 | €66,000 |
| Years 6–10 | €400,000 | €88,000 | Potentially €0 | €88,000 |
| Years 11–15 | €500,000 | €110,000 | Potentially €0 | €110,000 |
| Total (15 years) | — | €1,320,000 | Potentially €0 | €1,320,000 |
This scenario uses illustrative profit figures and the 22% Greek corporate tax rate. The actual exempted amount is capped by the approved aid intensity limit set in the Ministry’s approval decision. Once the approved cap is reached, standard corporate tax applies for the remaining period within the 15 years. The €0 outcome shown below assumes an approved exemption of at least €1,320,000, a sufficient unused balance in every year, compliance with the annual utilisation limits, and no distribution of the profits corresponding to the special reserve — if any of these conditions is not met, tax becomes payable accordingly.
Combining the Tax Exemption with the 70% Capital Grant
Stacking the grant and tax-exemption forms of aid in a single project is subject to the applicable EU State-aid cumulation rules — including Article 8 of Regulation 651/2014 where the GBER applies. The combined aid from all sources cannot exceed the maximum aid intensity applicable to the investment, and the grant is provided at the percentage available under the applicable scheme and call — not at a single flat rate. In practice, many investors choose one instrument — grant or exemption — rather than combining both, based on the project’s financial profile:
- Capital-intensive project with lower early profitability: Cash grant is usually preferred — it reduces the capital burden regardless of profit timing, with disbursement following certified implementation stages and the terms of the applicable call.
- High-margin project with strong early profit: Tax exemption may deliver higher total value, especially over 15 years, if early profitability is strong.
- Mixed profile: Partial combination may be possible within cumulation limits. Scheme selection is assessed under Pillar 03 (Tax Profile) and Pillar 06 (Capital Stack) of the 360° Protocol and documented in the Tax Memorandum and Capital Stack Map deliverables.
For more on the cash grant, see the capital grant guide.
Frequently Asked Questions
Does the 15-year tax exemption apply to dividends or only to corporate income?
The exemption applies to corporate income tax at the level of the eligible entity — and, by law, the tax that corresponds to profits distributed or withdrawn is not covered by the exemption in the same way. Dividend distributions to shareholders remain subject to the applicable withholding tax rates under Greek law and the applicable bilateral double taxation treaties. In addition, distribution or capitalisation of the special reserve is tied to the long-term obligations of the law and may trigger taxation or clawback — the timing and structuring of any distribution is a decision that requires tax planning, not an afterthought. For the wider incentive framework, see the Development Law guide.
Can a US investor benefit from the Greek tax exemption given the US-Greece Double Taxation Treaty?
The aid is granted to the eligible Greek entity carrying out the investment — not directly to the foreign shareholder. The treaty determines how Greek-source income is treated in the US. Profits covered by the approved exemption amount are relieved from Greek corporate tax at the entity level during the utilisation period. The Greek exemption does not automatically generate an equivalent exemption, deduction or foreign tax credit in the US; the outcome depends on the corporate structure, entity classification, US domestic law and, where applicable, the US–Greece double taxation treaty. Professional US and Greek tax counsel should be engaged for any cross-border structure.
Is the tax exemption available for real estate rental income?
The Development Law tax exemption applies to productive investment projects — manufacturing, tourism, renewable energy, technology, and similar sectors. Passive letting of residential or commercial property does not qualify; operational investments — such as qualifying tourism projects that meet the terms of the applicable scheme and call — can.
What documentation is required to claim the exemption?
The Ministry approval decision specifies the approved exemption amount. The benefit is declared to AADE (the Greek tax authority) through the annual tax return and the Tax Exemption Declaration, and the equal special reserve must be kept in a distinct account in the company’s financial statements. Aggelakakis & Associates manages compliance documentation throughout the exemption period.
To explore whether the 15-year tax exemption or the cash grant is the better instrument for your project, schedule a tax strategy consultation with our team at readiness@aggelakakis.gr. Review the full Development Law guide for the complete incentive framework.
IMPORTANT NOTICE — This article is provided for general information purposes only and does not constitute tax, legal or investment advice, and no approval, amount or tax outcome is guaranteed. In all cases the law, the applicable call and the individual approval decision prevail over this article. Primary sources: L.4887/2022 (A’ 16), L.5203/2025 (A’ 87), L.5297/2026 (A’ 64), Regulation (EU) 651/2014. Eligibility, amounts and conditions depend on the applicable aid scheme and its call and are subject to change; consult qualified tax and legal advisors before any decision. Legal framework as reviewed on 14 July 2026.
