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The European court will hear the case with the questionable tax concessions in Greece

27 February 2010 / 11:02:52  GRReporter
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The European commission decided to ask the European court on the matter for the illegal tax concessions which were granted in 2003 and 2004 to hundreds of private companies in Greece. According to the ruling of the European commission from 2007 Greece had to recoup the subsidies given in violation of the rules of the European Union. Regardless of the decision of the commission currently Greece has not repaid not a single euro from the money it owes.

According to the article 2 of the Law 3220/2004 the Greek companies had the right to deduct 35% of the amount of the yearly profit (for the tax years 2003 and 2004) for reinvestments. The companies who had the possibility to take advantage of the tax concessions were in the textile production, metallurgic industries, farming companies, the car industry, the companies in the energy sector, commercial companies which act on an international level as well as the tourist bureaus. The companies which took advantage of the respective tax concession were forced to use the available funds for purchasing new equipment, trainings of the staff or expansion of the tangibles.

On July 18th, 2007 the European commission announced that the tax concessions granted by the Greek government are “incompatible with the rules of the European Union for granting government subsidies.” The decision of the Commission was that Greece should instantly and effectively repay the amounts of the illegally granted subsidies including the interests on them.

Almost three years later the Greek authorities have not provided any information to the Commission which confirms the repayment of the required amounts. Because of this reason the Commission made a decision to turn to the European court which should deliver a judgment on the problem and force the Greeks to repay the wrongfully granted subsidies. “These subsidies are illegal because they do not meet the principles of the loyal competition, accepted by the European Union. The commission has decided to take all possible actions in order to grant the equality of all member countries,” stated the commissionaire of the economic matters in the European Union Joaquin Almunia.

Tags: EconomyCompanies tax concessions
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