Summary
This article examines Circular No. Ε2007/2026 (“Instructions for completing and clearing the income tax return of legal entities for the tax year 2025”), comments on the significant changes in codes compared to the previous framework (tax year 2024), and documents these changes based on laws and administrative decisions. The analysis includes comparative tables of codes, legal justification, and practical conclusions regarding tax treatment and audit behavior.
General Overview
The circular confirms that for the year 2025, Form N remains unified for all legal entities under Article 45 of the Income Tax Code. However, it clarifies that in the electronic application, only the codes relevant to each category of taxpayer (single-entry/double-entry/non-profit/IFRS-GAAP) can be completed. This continues the approach of consolidating information into a unified electronic format, supporting immediate assessment and automated control, in line with the new tax procedure framework (Ν.5104/2024).
Key Structural Changes Identified in the Circular:
- Pre-population of codes from Form E3 (codes 015, 116–119) for businesses keeping books under IFRS/GAAP.
- Centralization of all non-deductible expenses into a single code (455).
- Introduction of specialized sub-tables (e.g., for non-cooperative jurisdictions under code 2013).
Main Code Changes — Practical Overview
Codes related to corporate transformations and loss transfers
658 (YES/NO): Indicates that the submitted return αφορά the contributing company in a transformation (merger/demerger) and allows for extended filing deadlines (until the last working day of the 6th month after year-end).
659 (YES/NO): Linked to Laws 4935/2022 and 5162/2024 regulating tax incentives for transformations and loss transfers.
Comment: Codes 658/659 reflect new tax treatment opportunities introduced by recent legislation. The circular introduces an electronic documentation mechanism (sub-tables under code 039 requiring VAT number and amounts), reducing the need for manual documentation.
Codes related to tax adjustments (tax reform)
2013: Tax adjustment statement — includes new functionality for transactions with non-cooperative/preferential tax jurisdictions (sub-tables with country selection), linked to Article 65 of the Income Tax Code.
2020–2032 (sub-codes): New codes for specific non-deductible expenses, such as:
2025: Excess cultural sponsorships (above 10% of net profits).
2027: Rental expenses not paid via electronic means.
2029: CSR expenses not deductible when no accounting profits exist
Code 455 — Centralization of non-deductible expenses
Code 455 now functions as a “repository” for the total of non-deductible expenses, while the detailed breakdown remains in the tax adjustment table (a practice that reduces the number of individual transfers to the main form).
Exemption Codes – Special Income Codes
Exempt income codes (e.g. 495, 480, 474, 458, 465,467, 459, 468, 471, 469, 559, 752, etc.) remain, but with enhanced documentation requirements.
495: Dividends exempt under Article 48 of the Income Tax Code → mandatory completion of Table 4 (4A/4B depending on origin)
Inactive codes for 2025
The circular does not introduce widespread code eliminations compared to 2024 but explicitly refers to “inactive” codes related to tax incentives not certified within 2025 (e.g., investment-related incentives).
Key Notes
New sub-tables (e.g., code 2013 for non-cooperative jurisdictions, code 039 for loss transfers when 659 = YES) indicate that electronic documentation becomes critical for audit readiness.
Furthermore, codes 995 and 996 take on particular importance for businesses claiming tax credits for offsetting. The circular defines the method of offsetting as well as the conditions under which immediate recoverability may apply.
Additionally, where the circular refers to “inactive codes due to non-certification of productive investments (for 2025),” taxpayers should be prepared to submit amended returns once certification is completed—a specific procedure also regulated under Law 5104/2024 (deadlines/amended filings).
In conclusion, the new sub-tables and YES/NO codes for corporate transformations indicate that businesses should organize internal digital files (e-files) in order to promptly meet assessment and audit requirements.