Minimum Presumptive Profit for Sole Proprietorships: How It Works and When It Applies to You

What Is Minimum Presumptive Profit?

Article 15 of Law 5073/2023 added Article 28A to the Income Tax Code. Together with Articles 28B to 28D, it sets a minimum amount of business profit deemed to have been earned by each sole proprietorship or self-employed professional. If the actual profit you declare is lower than this minimum, you are taxed on the minimum amount. The rule applies exclusively to sole proprietorships and self-employed professionals, not to companies such as IKE, OE and EE, which are taxed on their actual profits.

How the Minimum Amount Is Calculated

Minimum presumptive net income is made up of three elements:

• Basic amount (a): starts from the annual amount corresponding to the minimum wage (€12,320 according to recent analyses) and increases with three-year periods of service. In published examples for experienced professionals, the base reaches €16,744
• Payroll surcharge (b): if the business employs staff, 10% of annual payroll costs is added
• Activity code surcharge (c): 5% of turnover exceeding the average for the relevant activity code (KAD) is added

In certain cases, other income of the individual, as provided for in Article 28B, reduces the minimum amount.

New Businesses and Special Reductions

New sole proprietorships benefit from a transitional scheme with gradual application of the minimum: for example, the minimum amount is reduced by two thirds (2/3) in the fourth year and by one third (1/3) in the fifth year of operation. A reduction is also provided for professionals who carry on their activity and reside in areas with specific characteristics. The exact conditions for each reduction depend on the activity, years of operation and area, so an individual review is worthwhile.

What This Means in Practice

In practice, you are always taxed on the higher of the two amounts: your actual profit or the minimum presumptive profit. This has three main consequences:

• If you declare a loss or very low profit, you are not taxed on zero or a small amount, but on the minimum amount
• A seasonal business or a year with little activity does not automatically lead to lower tax
• Advance tax is calculated on the resulting tax, so it too is affected by the minimum amount

The connection with loss carryforward matters for this article: when minimum presumptive profit applies, a declared loss does not result in zero tax, and its use follows special rules.

What Was Announced at the 2026 Thessaloniki International Fair

Relief for compliant self-employed professionals was announced at the 2026 Thessaloniki International Fair (TIF): the two surcharges currently increasing the minimum amount are to be abolished, namely 10% of payroll and 5% of turnover exceeding the average for the activity code, effective from tax year 2026, provided the professional meets compliance criteria. This means the base is limited to the amount derived from the minimum wage and three-year service periods. The measures are in the process of being legislated and the final terms may change, so their current form must be checked before any decision.

Two Calculation Examples

The examples use the income tax scale from the published calculations: 9% up to €10,000, 20% from €10,001 to €20,000 and 26% from €20,001 to €30,000.

The amounts are illustrative and based on published examples.

What You Can Do

There is no lawful way to avoid the minimum, but there are actions worth examining with your accountant:

1. Check that all lawful business expenses have been recorded and correctly deducted, so that your actual profit is accurate.
2. Check whether you qualify for any of the prescribed reductions, for example because you are in your first years of operation.
3. Assess the compliance criteria announced for abolishing the surcharges.
4. If your actual profit is high, assess converting to a company, where you are taxed on actual profits. This decision requires an individual study, because it changes the entire tax and social insurance framework.

The Most Common Mistakes

1. Assuming that declaring a loss results in zero tax
2. Ignoring the minimum when planning liquidity for tax and advance tax
3. Failing to record lawful expenses, resulting in overstated actual profit
4. Being unaware of reductions for new businesses
5. Assuming the TIF announcements already apply while they are still being legislated
6. Confusing minimum presumptive profit for sole proprietorships with personal living-expense presumptions

5 Practical Tips

1. Calculate your business’s minimum amount before filing the return.
2. Budget liquidity for tax and advance tax based on the higher of actual and minimum profit.
3. Keep complete expense records so that your actual profit is reflected accurately.
4. Monitor legislative steps following TIF 2026 to abolish the surcharges.
5. If your income consistently exceeds the minimum, assess with your accountant whether an alternative legal form is worthwhile.