At the beginning of my tenure in the Ministry of Foreign Affairs, I received a phone call from George Horiates, the active Greek-American who had recently been elected President of AHEPA. He told me AHEPA was going to make a significant donation – valued at about $300,000 – to Evangelismos hospital in Athens in the form of medical equipment, but the organization was being asked to also pay the VAT (Value Added Tax) which was somewhere around 24% at the time.
This issue was an old one, going back many years, and deprived Greece of a significant number of donations.
We received several complaints at the newspaper about this issue through the years.
One Greek-American, for example, bought computers for the children of a school in his home region of the Peloponnese and was asked to pay VAT. He protested in vain.
So I had to move immediately so that AHEPA’s donation to the Greek state would not be lost, but at the same time, I wanted to send a message to other potential donors that Greece was getting its act together and was becoming more rational and modern.
I contacted the appropriate colleague right away. He was kind enough to visit me in my office, and I asked him about it. He immediately agreed that it was reasonable not to pay VAT on donations.
It would require, however, he hastened to add, new legislation to amend the law.
And that, he added, takes time. But, he assured me, it will be done.
Unfortunately, many – very many – issues can only be resolved by legislative amendment.
I had no choice but to wait and keep reminding the appropriate people of the existence of this issue as well.
During this past weekend’s teleconference with Prime Minister Kyriakos Mitsotakis and Andreas Dracopoulos, Co-President of the Stavros Niarchos Foundation (SNF), about the Foundation’s new and huge donation of $100 million – mainly to Greece – for the fight against the coronavirus, Mitsotakis revealed that Greece will now exempt charitable donations from the VAT, noting that “an important opportunity has now been given to foundations to substantially increase their offerings for public benefit purposes.”
Although I don’t yet know which model the government used – European, American, or a combination of the two – and whether the law also offers tax deductions to donors as is done here, it is nevertheless an important development. It seems to untie the hands of potential donors and widens the outlook for the expansion of charitable activity in Greece as well.
Fortunately, the Prime Minister mentioned it the day before yesterday and we were thus informed, because otherwise we would have missed it in the fine print of the legislation if he had not.
Maybe this is because many in Greece do not appreciate the seriousness of this issue and do not attribute to it the importance it deserves, but the Prime Minister, who has lived abroad, understands it well.