Why They Don’t Come: Greece World’s #1 Toughest on Business

N. Ikonio, Perama, Piraeus. (Photo by Eurokinissi/Georgia Panagopoulou, file)

A 29 percent corporate tax rate, a government fighting the prospect of investors and a notoriously difficult and labyrinthine bureaucracy – along with bribery – have propelled Greece to the top of the list for business complexity.

That was devised by the TMF Group which compared administrative and compliance demands across 76 jurisdictions, said Accountancy Daily, rankings also based on hiring and employment factors, tax compliance and regulations.

Under the ruling Radical Left SYRIZA, which has hard-core elements trying to keep out all foreign companies, and Prime Minister Alexis Tsipras’ tax avalanche, investors have stayed away in droves although he said they are needed to help a slow recovery from a nine-year-long economic crisis.

Three international bailouts of 326 billion euros ($367.27 billion) ended on Aug. 20, 2018 after eight years but Greece still hasn’t been able to make a full return to markets and now a July 7 snap election is looming.

Major opposition New Democracy leader Kyriakos Mitsotakis, leading by 9 points in polls, said he would lure foreign businesses, issued the common promise to cut red tape and said he would give the go-ahead to major projects the government is stalling, including the $8 billion development of the abandoned Hellenikon International Airport.

With 2018 being particularly volatile and taxes kicking in, Greece went from 18th then to first this year after the effect hit.

Accountancy Daily said all the obstacles mean “Greece is the most challenging country to do business with a fragmented tax system and complex compliance requirements,” ranking ahead of Indonesia, Brazil and the United Arab Emirates.

The easiest places to operate are the Cayman Islands, Curaçao and Jersey, which benefit from political stability, pro-business policies and favourable tax advantages, the report said.

Greece’s complexity is attributed to frequently changing legislation, differing regional tax rates and inconsistent treatment of companies by the authorities, not to mention common requests to grease palms with envelopes with bribe money to get things done.

The report stated: ‘Greece’s existing legislation can be complicated and new measures are continually being introduced. Sometimes, multiple laws conflict and it can be hard for businesses to know which one to comply with,” scaring off prospective investors.

In some cases, Valued Added Tax (VAT) refunds are subject to different treatment depending on the tax office dealt with, with the rate varying by more than 10 percent, the report also added.

Some Greek islands operate as independent provinces for compliance and tax, highly unusual, said TMF Group, since compliance requirements vary between provinces in only 22% of jurisdictions and tax requirements in only 33% of the countries surveyed.

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