The provisions of Article 49 of the Greek Income Tax Code (Law 4172/2013), as in force having been amended by the provisions of Article 23(4) of Law 4223/2013 and further amended by Article I(D)(D1)(12) of Law 4254/2014, introduced thin capitalisation rules to combat abuses. ...
Continue readingIn respect to the taxation on Management Board Member’s fees and dividends provided by a corporate body or legal person or legal entity with registered offices in the UK, the following apply: According to the new Income Tax Return Code (Law 4172/2013, from now on “ITRC”), the taxpayer that is a tax resident of Greece, is under the obligation to pay taxes based on his global income. A. Dividends taxation Income from dividends is considered a capital income (article 35 of ITRC) and is being taxed at a rate of 10% (article 40 par. 1 of ITRC). When a Greek national taxable natural person...
Continue readingThe fundamental rules of taxation in Greek law The fundamental rules of taxation in Greek law are contained A) in article 4 §§ 1 & 5 of the Greek Constitution which read as follows: 4§1 “Greeks are equal as against the Law”; 4 §5 “Greek citizens contribute without discrimination to public fees depending on their powers” B) in article 78 §§ 1 & 2 of the Greek Constitution: 1) No tax is imposed or collected without a formal law that sets the object of taxation, the income, the nature of property, the expenses or the transactions to which the tax relates...
Continue readingΤhe main taxes imposed on individuals The main types of taxation on individuals are income and capital taxes. Of course, there are also many other forms of indirect taxes, mainly on transactions and consumption. Income taxation is the most important tax that affects individuals. The two main categories of capital tax are tax on inheritance/gifts inter vivos/lottery gains and tax on the transfer of real property. In the present chapter we deal only with 1) income tax 2) tax on inheritance/gifts inter vivos/lottery gains; A. Income tax on individuals 1) Who is subject to income tax in Greece? Subject to income tax in Greece...
Continue readingA natural person is a tax resident of Greece, as long as: a) it has its permanent or main residence or habitual residence or the center of its vital interests, which is to say its personal or economical or social links in Greece...
Continue readingThe New Income Tax Code (Law 4172/2013 hereinafter “ITC”) introduced in Greek Tax legislation provisions pertinent to Controlled Foreign Corporation Rules (“CFCs rules”). Controlled Foreign Corporation are legal persons or legal entities which are tax residents in different countries with such links between them, leading to effective control of one company (“Foreign Company”) over the other (“Controlled Company”). The CFC rules are features of an income tax system designed to limit artificial deferral of tax by using offshore low taxed entities. Pursuant to Article 66 ITC, taxable income shall include the non-distributed income of a legal person or legal entity (which...
Continue readingPursuant to Article 109 par. 4 and 5 of the previously in force Income Tax Code (Law.2238/1994 - hereinafter "ITC"), the tax paid in advance, the withholding tax and the tax which “demonstrably” paid abroad regarding the income obtained abroad, are considered to be deductable from the total due income tax amount (including the additional tax) in Greece. In no case, the tax paid abroad can be higher than the tax amount which is attributable to such income in Greece. To prove the amount of tax paid abroad, a certification of the state's competent Tax Authority in accordance with Double...
Continue readingAccording to Article 6 of the Income Taxation Code (hereinafter: "ITC" - Law 4172/2013), as in force, "Permanent establishment" means a specific place of business through which an undertaking carries out all or part of its operations. Moreover, according to the Explanatory Memorandum of the same Law, the concept of "permanent establishment" is used primarily to determine the jurisdiction entitled to impose taxation on the profits of an undertaking according to Articles 3 and 4 ITC, in line with the OECD (Organisation for Economic Cooperation and Development) model Conventions for the Avoidance of Double Taxation and all related guidelines. In particular, "permanent...
Continue reading(Ministerial Circular POL 1167/2013) In accordance with Article 788 of Regulation (EEC) No 2454/93 laying down the provisions for the implementation of the Community Customs Code, the ‘exporter’ shall be considered to be the person on whose behalf the export declaration is made and who is the owner of the goods or has a similar right of disposal over them at the time when the declaration is accepted. The aforementioned “similar right of disposal over the goods” and consequently the completion of export formalities can be exercised and carried out by the seller established in Greece, provided there is sufficient evidence (contract,...
Continue readingQuite surprisingly, after its election in January, the government did not seek to replace the General Secretary of Public Revenue, Mrs. Aikaterini Savvaidou, a reputable technocrat whose professional career is very distant from its philosophy. However, the fact that she stayed in office may not be a voluntary political decision; it is also due to the commitment of the previous government to establish a rigid political independency for this Secretariat, which for decades in the past had been subject to political intervention. A major (albeit anticipated) change was the appointment of a new deputy minister of finance, Mrs. Nadia Valavani...
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