General anti-avoidance rule under Greek tax law
Under Law 4174/2013 (Tax Procedure Code), the Greek legislator has established rules to prevent tax avoidance in line with OECD guidelines and the European law, in general. In particular, according to the general anti-avoidance rule (Article 38 of the Tax Procedure Code), which has been in force since 1.1.2014, the Tax Administration may disregard any artificial arrangement, or series of arrangements, aimed at avoiding taxation and leading to a tax benefit. In determining whether an arrangement or series of arrangements has led to a tax benefit, the Tax Administration compares the amount of tax due by a taxpayer, having regard to such arrangement, with the amount that the same taxpayer would owe under the same circumstances in the absence of the arrangement.
It may be seen from the above that the Greek tax authority has the discretion, within the limits set by the law, to disregard any transaction, action, operation, agreement, grant, understanding, promise, undertaking or other act carried out with the purpose of avoiding taxes. The Directorate for Dispute Resolution has applied such rule (Athens Directorate for Dispute Resolution 3680/2017) and considered in the case examined that stamp duty was due, because the actual transaction was a loan agreement performed in Greece, and the company had proceeded to a series of artificial arrangements, within the meaning of Article 38 of the Tax Procedure Code (payment of the amount borrowed abroad and transfer of such amount within a short period of time in Greece, re-exportation abroad to repay a previous loan that had been granted to the applicant company by the lender). From a methodological point of view, the reasoning of the Directorate for Dispute Resolution has two levels: first, it qualifies a series of commercial actions as lacking commercial substance, which makes them artificial arrangements; second, such artificial arrangements result in a tax benefit, i.e. in non-payment of stamp duty.
In short, tax authorities are not bound by the legal form used by taxpayers for a commercial transaction/operation, but may look for the actual legal relationship and impose the relevant sanctions (see, for example, State Legal Council 422/2009 regarding Law 2166/1993, Council of State 1408/2005 regarding VAT).