New Greek tax provisions for Investment Funds and Fund Managers
With the aim of enhancing Greece’s attractiveness as an investment destination, the provisions of recently enacted Law 5313/2026 clarify the tax framework applicable to Alternative Investment Funds (AIFs) and Alternative Investment Fund Managers (AIFMs) established in Greece, correcting previous legislative drafting inconsistencies that had caused uncertainty, and introduce a favourable tax treatment for equivalent investment funds established both in the EU and in third countries (subject to conditions).
In addition, the new law introduces a series of incentives intended to attract highly specialized professionals in the field of investment management, including related support services (legal, consulting, technology, banking and others), with the objective of developing Greece into a hub for alternative investments management services.
Tax neutrality of EU and third-country investment funds
The new law clarifies that the tax regime applicable to Greek AIFs and their unitholders is aligned with that of Close-ended Mutual Funds (AKES). In practice, this means that either the Greek AIF itself may be subject to tax (i.e. tax rate equal to 5% on the European Central Bank interest rate applicable for main refinancing operations, and calculated annually on the difference between the value of the AKES participations as reflected on 31 December of each tax year and the acquisition cost of such participations increased by the cumulative operational costs of the AKES) or the AIF may be tax transparent, with taxation occurring at the level of its unitholders.
With regard to AIFs established in EU Member States (EU AIFs), it is clarified that they are not subject to tax in Greece.
Finally, it is provided that, as of 1 January 2026, funds established in third countries will not be subject to tax in Greece, provided that their registered seat is not located in a non-cooperative jurisdiction and that they are supervised by IOSCO (International Organization of Securities Commissions).
Clarifications on place of effective management and permanent establishment of foreign investment funds and their managers
In order to facilitate the provision of investment fund management services in Greece, the new law explicitly provides (with effect from 1 January 2026) that the management, delegation of management or management of portfolio of EU investment funds (EU AIFs), as well as of qualifying third-country funds, does not constitute exercise of effective management that could result in the acquisition of tax residence in Greece for said funds or (subject to conditions) for underlying companies in which the funds invest.
It is further provided that the provision of portfolio management and consulting services by Greek legal entities, in the context of their ordinary business activities, to EU AIF managers and managers of third-country funds, does not in itself create a permanent establishment in Greece for such managers.
Tax treatment of carried interest
Taxation as capital gains (15%)
Under the new law, “carried interest” received by employees of Greek legal entities providing services to EU AIF managers or to managers of third‑country funds (subject to the relevant supervision conditions), as a reward for achieving high performance of the investment portfolio, is taxed as capital gains income at the rate of 15%.
Preferential tax rate (5%) for individuals relocating their tax residence to Greece
In order to create an incentive for attracting to Greece specialized professionals in investment fund portfolio management, the new law introduces a reduced tax rate of 5% on carried interest received by individuals who transfer their tax residence to Greece under Article 5C of the Income Tax Code, in order to enter into an employment relationship with Greek legal entities providing services to managers of EU or third-country investment funds, provided that the Greek legal entity employing them incurs annual expenses in Greece of at least
EUR 3 000 000.
