Law 5313/2026, ratified on 25 June 2026, introduces a series of amendments to the dedicated tax framework for carried interest for Greek tax-resident individuals involved in fund management, while also revising the application and compliance deadlines under the lump sum tax regime (LSTR) and the retirees tax regime available to individuals relocating to Greece.
New tax framework for carried interest
Effective from 1 January 2026, the new law establishes a targeted tax framework for carried interest in the investment funds sector. The key developments are twofold:
Level playing field: Individuals involved in the management of Greek funds, EU AIFs, and third-party funds will benefit from a uniform 15% capital gains tax rate on carried interest received; and
Relocation incentive: A preferential 5% tax rate is now available for carried interest received by qualifying individuals who relocate their tax residence to Greece.
The stated objective of this framework is to enhance Greece's competitiveness as a location for establishing investment structures and to attract specialised human capital in investment management—a development that may be of strategic interest to fund sponsors and their advisers.
Tax treatment of carried interest as capital gains
Under the existing regime, which addressed this matter narrowly, carried interest received by individuals who are members of a Venture Capital Mutual Fund (“AKES” in Greek) Manager is taxed as income from capital gains at 15%.
The new provisions explicitly extend this favourable treatment to carried interest1 received by employees of Greek-established legal entities that provide services to affiliated2 alternative investment fund managers (AIFMs) or corresponding third-country fund managers, provided that the latter:
(i) are not established in a non-cooperative state within the meaning of Article 65 ITC; and
(ii) are supervised by a competent authority in their country of establishment that is accredited to the International Organization of Securities Commissions (IOSCO).
In the report accompanying the enacted law, the legislature explicitly acknowledges the nature of carried interest as a capital gain, which should serve to resolve tax qualification uncertainty around carried interest received directly from entities managing funds other than AKES.
Special 5% tax rate for relocating individuals
A preferential 5% tax rate applies to carried interest where two cumulative conditions are satisfied:
a. Relocation under the impatriates regime: The individual enters into an employment relationship with the Greek legal entity and, on that basis, transfers their tax residence to Greece under the special impatriates regime of Article 5C ITC. This requires tax residence outside Greece for at least five of the preceding six years; and
b. Minimum Greek expenditure threshold: The Greek legal entity must incur annual expenses of at least €3 million in Greece.
Importantly, carried interest entitlements corresponding to work performed in fiscal years prior to the individual’s relocation to Greece are not subject to Greek tax under this regime—a potentially significant benefit for fund professionals with accrued but unvested carried interest.
The incentive applies for a period of seven fiscal years.
A necessary add-on: The above framework regulates the tax treatment of persons employed by a Greek company associated with the fund manager, but also attempts to address in a comprehensive manner key tax considerations for cross-border fund structuring, by explicitly providing that:
where the activities undertaken in Greece are limited to fund management, delegation of fund management, and portfolio management for qualifying funds, this should not in itself constitute the exercise of effective management of the qualifying funds or -under conditions- the underlying holding companies; and that,
the provision of said services shall not in itself constitute a permanent establishment in Greece for the qualifying funds or their managers.
Regulatory note: The new tax rules do not exempt the Greek company from regulatory obligations for fund management or delegation thereof; an ad hoc assessment of regulatory aspects of implementation will be required.
Key deadline changes to the LSTR and retirees tax regime
Law 5313/2026 introduces a number of procedural amendments to the LSTR and retirees tax regime, which provide favourable tax treatment for foreign investors and foreign pensioners relocating their tax residence to Greece. The amendments primarily concern the applicable payment and application deadlines, while also streamlining certain administrative procedures.
i. Lump-Sum Tax Regime
The following amendments have been introduced to the LSTR:
Extension of the annual payment deadline
The deadline for payment of the annual lump-sum tax is extended from the last working day of July to the last working day of December of each tax year. The revised deadline also applies to individuals entering the regime for the first time, replacing the previous requirement to pay the lump-sum tax within 30 days of the approval of the application.
Abolition of the statutory application deadlines
The statutory deadline for submitting an application (31 March ) and the deadline for the tax administration to approve or reject the application (last working day of June) have been abolished. Going forward, both deadlines will be determined by administrative decision of the Independent Authority for Public Revenue (AADE).
No change to the tax amount
Most importantly, nothing changes in the annual lump-sum tax amount due (i.e. EUR 100,000, plus EUR 20,000 per additional family member).
ii. Retirees tax regime
The same amendments described above for the LSTR apply equally to the Retirees Tax Regime, namely:
extension of the annual payment deadline (now the last working day of December); and
abolition of statutory application deadlines, with timelines to be set by administrative decision of the Independent Authority for Public Revenue (AADE).
Additionally, the 7% tax rate on qualifying foreign-source income remains unchanged.
1Based on the explanatory memorandum, carried interest is defined as a reward (over and above salary, which is taxed under the general provisions of ITC) of an uncertain and variable nature, dependent on the achievement of a high return on the investment portfolio and payable only where it exceeds a predetermined return threshold (“hurdle rate”), while remaining subject to the discretion of the employer or the manager.
2In accordance with the provision of art. 2 ITC.