Tax experts at Artion SA in Greece have called for legal reforms allowing businesses to deduct value-added tax on corporate electric vehicles.
Chief Executive Officer Yiorgos Dalianis, along with board member Natassa Daliani and accountant Vasiliki Kapellaki, stated that current Greek tax laws penalise companies attempting to transition to zero-emission fleets.
The tax advisors highlighted a fiscal paradox where the Greek state actively encourages electric mobility through direct purchase subsidies and tax incentives while treating value-added tax as a permanent, non-recoverable expense for commercial vehicle users.
Value-added tax, commonly known as VAT, is a consumption tax applied to goods and services across the European Union. Under standard European tax principles, VAT is designed to remain neutral for commercial enterprises by allowing companies to deduct the tax paid on business inputs from the tax collected on their sales.
Under clause e of paragraph 4 of Article 30 of Greek Law 2859/2000, nearly all passenger cars are categorized as items of private consumption. Because of this classification, the law prohibits commercial enterprises from deducting VAT not only on vehicle purchases and leases, but also on electricity, fuel, maintenance, repairs, and other operational expenses.
The Artion SA tax consultancy noted that the original rationale behind the total ban was administrative convenience. Historically, Greek tax authorities considered it too difficult to distinguish between private and business vehicle use without introducing complex allocation procedures and burdensome audits.
However, Dalianis and his co-authors argued that this administrative reasoning belongs to a completely different era. They emphasized that modern businesses operate with digital tools, including telematics, global positioning system tracking, electronic trip logs, and formal corporate fleet management policies.
Telematics systems integrate telecommunications and information processing to transmit real-time data on vehicle movement, route history, and energy usage. In modern fleet management, these systems allow companies and tax auditors to track vehicle activity with high precision, significantly reducing the risk of fraud or personal use abuse that originally justified a total tax deduction ban.
The tax experts stressed that the absolute prohibition on VAT deduction has become a major competitive disadvantage for Greek companies operating within the European single market. While Greek firms absorb full tax costs, competitors in other European Union member states benefit from more flexible tax rules.
According to the authors, several European Union member states allow partial VAT deductions of 40 percent or 50 percent on corporate passenger cars, reflecting an assumed combination of business and personal use. Other member states permit a full 100 percent VAT deduction when a company provides electronic documentation proving exclusive business use.
To illustrate the financial impact of the restriction, Dalianis, Daliani, and Kapellaki presented a practical example based on a standard four-year operating lease for a commercial electric car with a monthly rental fee of 600 euros plus VAT.
Over the 48-month contract period, the cumulative VAT paid on the lease exceeds 6,900 euros. Under current Greek regulations, a business cannot recover any portion of that sum, turning the entire tax payment into a permanent operational cost. By contrast, under a 50 percent partial deduction regime, a company would recover approximately half of that amount, saving over 3,450 euros.
Dalianis noted that this cost disparity directly undermines the core principle of VAT neutrality. Because value-added tax is intended to function as a neutral levy on commercial activity, denying deductions for productive inputs used in daily operations effectively transforms the tax into an additional penalty on corporate investment.
The European Single Market was established to create a level playing field for businesses operating across member states by minimizing trade barriers and harmonizing tax frameworks. When member states maintain divergent rules on commercial input deductions, domestic enterprises can face higher baseline operating costs than foreign competitors in the same sector.
European Competitiveness and Tax Neutrality
Rather than seeking an informal concession, the authors called for a specific legislative reform to modernize the tax code. They urged lawmakers to amend clause e of paragraph 4 of Article 30 of Law 2859/2000 to create a dedicated VAT deduction framework tailored specifically for pure electric corporate passenger cars.
The proposed reform outlines a two-tiered deduction structure. As a baseline rule, the framework would grant a 50 percent partial VAT deduction on the purchase, lease, and routine operational costs of fully electric corporate vehicles. This fixed percentage would serve as a safe statutory presumption of mixed commercial and personal use, eliminating excessive paperwork while maintaining tax certainty.
Alongside the partial deduction baseline, the experts proposed allowing a full 100 percent VAT deduction when a business provides digital verification of exclusive commercial use. Companies could demonstrate exclusive business use through electronic route logs, fleet telematics data, and formal internal usage policies approved by corporate management.
The authors maintained that establishing a dual deduction system would not trigger uncontrolled tax evasion. Instead, it would formally recognize that electric corporate cars function as primary operational tools for modern businesses rather than purely personal consumption assets.
In their conclusion, Dalianis, Daliani, and Kapellaki argued that Greece cannot logically promote electric mobility through direct tax policies while simultaneously penalizing it through indirect taxation. They stressed that Greece does not need to copy foreign models blindly, but must align its tax regime with its own green transition goals.
In fiscal terminology, direct taxation applies to income and wealth, such as corporate profit taxes, where the state offers deductions for green investments. Indirect taxation, such as VAT, is levied on transactions. When indirect tax rules fail to mirror green policy objectives, commercial incentives become contradictory.
Institutional Reform for Green Fleet Transition
The tax advisors concluded that introducing partial VAT deductions, along with full deductions for verified commercial use, is not an unfair privilege for corporations. Instead, they described it as a necessary institutional adjustment to ensure Greece's tax framework keeps pace with technological innovation, environmental policy, and European economic integration.
Yiorgos Dalianis is the chief executive officer of Artion SA and founder of the ARTION Group, working as an economist and tax consultant. Natassa Daliani serves as a shareholder, board member, and deputy chief executive officer of Artion SA, while Vasiliki Kapellaki works as an accountant in the firm's double-entry bookkeeping department. Artion SA provides financial and tax consulting services from its headquarters on Oedipodos Street in Chalandri.
