Local firms seeking TAP contracts spared of VAT-linked inequality

A demand by Greek construction companies seeking the elimination of unfair bidding conditions when vying to secure sub-contracts for work on the TAP (Trans-Adriatic Pipeline) project, caused by a VAT-related inequality, will be met through an amendment included in a mini tax reform bill.

Project sub-contract offers made by Greek construction companies are burdened by VAT amounts, while rival foreign bidders are exempted from the tax, prompting a significant disadvantage for local companies.

This inequality results from European law that exempts VAT charges on invoices concerning bilateral dealings within the EU.

Until now, Greek companies, when engaged in locally based business activities, such as the TAP project’s construction within Greece, have needed to comply with local VAT regulations. The prospective amendment will offer Greek companies equal VAT terms with those enjoyed by foreign EU-based firms.

The VAT-linked inequality for Greek companies was raised last month by Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis in a letter to TAP’s chairman of the board, John Attrill, who expressed understanding in his response.

The TAP pipeline will supply Azeri gas to Europe via a route to cross northern Greece, Albania, and the Adriatic Sea to Italy.