At the heart of the issue is the taxation of non-profits, which, under a 2013 law's interpretation by the tax authority, are subjected to heavier taxes than for-profit businesses and individuals. Currently, foundations and NGOs face a 22% tax on income from assets such as rent, interest, and dividends—on par with the tax on undistributed corporate profits.
In contrast, individuals earning dividends pay just 5%. Moreover, non-profits are barred from deducting operating expenses, including salaries, from their taxable revenue.
Although the law stipulates that income generated in pursuit of a non-profit’s mission should be tax-exempt, conflicting interpretations have led to excessive taxation. A recent report by the Bodossaki Foundation highlights cases where some organizations are taxed at 22% on their total revenue from property and investments. Experts argue that non-profits with a purely public-benefit mission and transparent governance should be exempt from such levies.
Beyond direct taxation, additional financial disincentives hinder non-profit funding. A 0.5% tax on donations—initially proposed for swift removal—remains in effect, often burdening donors rather than recipients. Until 2014, in-kind donations were also subject to a 23% VAT, discouraging contributions. Furthermore, corporate social responsibility (CSR) tax deductions do not extend to charitable donations, prompting some Greek foundations to establish financial trusts abroad.
