The newsletter was drafted by Alexanda Karadima, Senior Associate on July 2, 2026
Law 5313/2026 (Government Gazette A’ 102/25.06.2026) introduces significant amendments to the Greek tax framework applicable to investment funds and investment management activities. The new provisions clarify the tax treatment of foreign investment funds, introduce safe harbors against the creation of Greek tax residence and permanent establishment in specified circumstances, and expand the existing carried interest regime to cover contractual performance-based remuneration.
Tax Treatment of foreign funds
Article 97(1) of Law 5313/2026 amends Article 56 of Law 4706/2020, clarifying the tax treatment of Alternative Investment Funds (AIFs) falling within the scope of Directive 2011/61/EU (AIFMD). The amendment corrects a legislative cross-reference and confirms that foreign EU AIFs remain outside the scope of Greek income taxation.
The legislation further extends the same tax treatment to corresponding collective investment vehicles (hereafter “CIVs”) established outside the European Union, provided that:
- they are not established in jurisdictions included in the EU list of non-cooperative jurisdictions for tax purposes; and
- they are supervised, directly or indirectly through their manager, by a competent authority accredited with the International Organization of Securities Commissions (IOSCO).
According to the explanatory memorandum, the notion of CIVs follows the OECD approach and refers to regulated, widely held investment vehicles holding diversified investment portfolios. As a result, the same tax treatment now applies to qualifying collective investment vehicles established both within and outside the European Union.
Tax Residence and Permanent Establishment
The reform also introduces an important statutory safe harbor designed to facilitate the establishment of investment management functions in Greece.
Firstly, the legislation confirms that the investment activities of qualifying AIFs and CIVs in Greece do not, by themselves, create Greek tax residence or a permanent establishment. This protection extends not only to the investment funds themselves, but also to legal persons and legal entities in which the relevant funds directly or indirectly hold at least 95% of the participation interests and which operate exclusively as holding or investment vehicles (“investment entities”), as well as to fund managers and investors.
Secondly, the legislation provides that the provision of portfolio management, investment management, investment advisory and ancillary services by a Greek management company does not, in itself, create Greek tax residence or a permanent establishment for the relevant investment funds, their investment entities (including sub-funds), fund managers or investors.
These provisions significantly strengthen legal and tax certainty for international fund structures and remove an important source of uncertainty for groups considering the establishment of investment management functions in Greece. This particularly important for hedge funds and other actively managed strategies, where investment decisions are often taken in real time and operational realities do not always align with traditional governance models.
You can read the full newsletter here: Newsletter_Law 53132026 Key Tax Reforms for Foreign Investment Funds, Investment Management Companies and Carried Interest