The recent Law No. 4532/2018 has introduced significant amendments to the invoicing process of both printed and broadcast advertisements. The new rules, adopted on 2 April 2018, will apply retroactively from 1 February 2018.
The most important change brought by the new law concerns the so-called "year-end rebates" that are offered every year by the media to the advertising agencies and are calculated as a percentage of their annual advertising costs.
Since 1995, the amount of the rebates could legally reach up to 9.9%. In the meantime, Law 4279/2014 provided for the repeal of the provision concerning the rebates. However, the relevant amendments set out in 2014, following negative reactions by the advertising market, were suspended and never came into application.
According to the new provisions of Law 4532/2018, the media can offer at the end of each calendar year, exclusively to advertising agencies, a rebate, the percentage of which cannot exceed 4% of their total annual advertising costs. The rebate cannot be provided in the form of equal amount of advertising time or space. It is also forbidden for the advertising agencies to offer the rebate, directly or indirectly, to their clients, that is the entities being advertised. In case of a breach of the above provisions, a fine equal to five times the amount of the granted rebate can be imposed. It is also noted that, for the implementation of this provision, only the entity that provides advertising services to all of its clients (advertisers) and deals with the media upon a written mandate from the clients is considered as an advertising agency. Entities that act as intermediaries between advertising agencies and media and businesses that only have contracts with the media without actually providing specific advertising services cannot receive rebates.
In the field of TV advertising, the provisions adopted on 2 April 2018 are also aiming at clarifying and specifying the framework for the implementation and operation of the recently enacted "Electronic System for the Distribution of TV Advertising Time". The date from which the new system is set to come into effect has also been moved to 1 January 2019 instead of the originally set date by Law 4487/2017 of 1 September 2018.
Lastly, another important development in the TV advertising market concerns the special tax on television advertisements. Law 3845/2010, which provides for a tax rate of 20% and is into effect since 2015, was amended by Law 4499/2017, in view of the pending procedure for the licensing of television channels. With the new provision, which applies from 1 April 2018, the rate of tax will be 5% for advertisements broadcasted by TV channels that will be granted a license, as well as by the channels of the public broadcaster (ERT) and the pay-TV channels. Until the licensing procedure is completed, however, it seems that for the existing private television channels the 20% special tax will continue to apply. The tax, either of 20% or of 5%, is calculated on the 80% of the value of each invoice after the deduction of any reductions granted, and regardless of whether the invoice was issued in the name of the entity being advertised or the advertising agency.
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