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Following the reactions by business circles the Greek government has decided to change, but not to completely withdraw, the disputed legal order that provides for the imposition of a preventive 26% tax.

During the debates in parliament, Deputy Minister of Finance Nadia Valavani said that the obligation to prepay 26% of the value of invoices should not apply in cases in which it would be proven that the transactions were real and not fictitious.

In particular, she said, "A change introduced in the order that regulates tripartite transactions will cancel the obligation of advance tax payment by companies that can prove the legality of transactions only when their legality is not obvious. Verification and tax return will take place within three months."

The news that the government is preparing to introduce this tax triggered a series of severe reactions in business circles, especially among representatives of major industries, including shipping. The reason was that the originally proposed legal text provided for a tax on the invoice value of transactions concluded between a company and firms the headquarters of which are located in countries with a preferential tax regime such as Cyprus, Bulgaria and others.

It also stipulated that the advance payment of 26% of the invoice value would be returned in full, but within 12 months and only after the Greek company had proved that the deal was real, not tripartite.

After the leadership of the Association of Greek Industrialists, almost all professional business associations sent to the cabinet letters to oppose the adoption of the legal measure in question.

Business representatives indicated that its implementation would drive Greek companies to move abroad en masse and "kill a large share of import trade."

It is worth noting that, with the specific measure, the Greek government aims to break the vicious practice of tripartite transactions, which provide opportunities for tax evasion and which are allowed by European legislation itself.

They use the following model: company A sells the goods, raw materials and services to company C that is headquartered in a "tax haven" or a country with a preferential tax rate. Company C in turn sells the goods to company B, which is their final recipient. The tripartite transaction significantly reduces both the profit and tax payable by company B, with the result that the state loses revenue.