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Requirements and procedure for the establishment of an office/branch in Greece under article 25 of Law 27/1975

Foreign shipping companies interested in establishing an office or branch in Greece under the provisions of Article 25 of Law 27/1975, are required to submit the following documentation to the Directorate of Maritime Policy and Development of the Ministry of Maritime Affairs: a. An application including the name, type, registered office and nationality of the foreign management company as well as its activity and the specific activities of its office in Greece as well as its representative. The above application will also state that: The company undertakes the obligation to import into Greece an annual foreign exchange, not compulsorily assignable, or...

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Overview of the shipping tax regime in Greece

Tonnage Tax Regime The Greek tonnage tax regime has been established as a favorable system of taxation of shipping activities. This tax system enables ship owners to plan their business activity in the long term without increased tax burdens, while it also contributes to keeping the cost of operating ships at a competitive level. In general terms, according to the tax provisions of Law 27/1975, the tonnage tax is payable by shipowners or ship-owning companies of ships under Greek flag and exhausts the tax liability of the shipowner, as well as their ultimate shareholders, up to the level of the private...

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Working remotely from Greece – Risk of a permanent establishment for the foreign employer

In the post-COVID 19 era, where the global mobility of employees and the cross-border remote working have increased dramatically, there are a number of tax issues that arise for both the foreign employer and the remote worker. One of the associated tax issues relates to the risk of a permanent establishment for income tax purposes being created for the foreign employer in the country from where the employee is working remotely from a home office. Α.Legislative Framework The assessment of whether a PE of a foreign employer company may be created in Greece is made on the basis of the applicable provisions...

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Charter of vessels and VAT implications

VAT on Bareboat Charter Based on the Greek VAT legislation, the bareboat charter of a vessel, where the owner is alienated from the vessel, is a service that qualifies as a “lease of means of transport”, whereas the crewed, time charter of a vessel is a service that qualifies as a “transportation service” of either goods or persons depending on the case. Based on article 14 of the Greek VAT Code: - The place of supply of the short-term lease of a means of transport (i.e. less than 90 days for vessels) is Greece, if the vessel is put at the...

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Greek income tax implications of a sale of a commercial pleasure yacht owned by a Greek NEPA

The legislative framework for NEPAs was up to recently regulated by L. 3182/2003, which was replaced by new Law 4926/2022, effective as of 20.4.2022. In specific, Part A of the new Law replaces the previously applicable regulatory framework on pleasure boats which was regulated by L. 4256/2014, while Part B includes, among others, the legislative framework for NEPAs. Law 4926/2022 According to article 65 par. 1 of L. 4926/2022, it is explicitly provided that articles 1 and 2 of Law 27/1975 also apply to a NEPA, provided it is a shipowner, as well as to its shareholders. Effectively, this provision extends...

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VAT treatment of commercial pleasure vessels that cease their activity and are intra-community supplied or exported

According to article 24 of the Greek VAT Code, the supply (sale) of goods that are exported outside of the Community (export) by the seller or a person acting on behalf of the seller, is exempt from VAT. Similarly, according to article 28 of the Greek VAT Code, the intra-community supply (sale) of goods that are dispatched or transported to another EU Member State by the seller or the acquirer or a person acting on their behalf, to another taxable (i.e. subject to VAT) person or to a non-taxable legal person acting in that capacity is exempt from VAT. Therefore, in case...

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VAT exemption of a sale of a commercial pleasure yacht – Conditions and applicable procedure

Conditions for the VAT exemption According to the provisions of article 27 par. 1 case (a) subcase (aa) of Law 2859/2000 (Greek VAT Code), a VAT exemption is provided for the sale of vessels falling under the below categories (and excluding vessels for private use intended for recreation or sport): aa) vessels intended to be used in high seas navigation and which carry out passenger transport for a fee or with which commercial, industrial or fishing activities are carried on, bb) coastal fishing vessels, cc) vessels intended for dismantling, dd) warships and State vessels, ee) lifeguards and other maritime assistance vessels. In relation to vessels...

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Foreign real estate company in Greece – examination of the obligation to establish a Greek branch

Regarding the examination of any obligation of a foreign real estate company to establish a branch in Greece , the issue is not sufficiently regulated by the existing provisions, as there are legislative gaps regarding various parameters. From 1/1/2015, foreign real estate companies that do not obtain income from business activity in Greece and which build a property owned in Greece or make additions or extensions to such property, have no obligation to keep accounting books and records. However, in case the foreign legal entities acquire income from real estate in Greece, and since from 1/1/2014 said income is considered  for  income...

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VAT on sales of newly built properties under a sale & lease-back contract with a financial leasing company

In accordance with Article 6 paras. 1, 3 and 4 of Law 2859/2000 ("VAT Code"), , the transfer of completed or unfinished buildings or parts thereof and the land transferred with them as a single property or ideal shares of land to which the presumption of completion applies, is subject to VAT, if it is carried out for a consideration, before the first installation in them. Buildings shall be deemed to be buildings in general and structures of any kind attached to the buildings or to the ground in a fixed and permanent manner. The first installation is defined as the...

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Subjection of financial leasing of real estate to VAT following a tax election request

According to Article 22 par. 1 case (kst’) of Law 2859/2000 (VAT Code), real estate leases are exempt from VAT, except for those under case (d') of paragraph 2 of Article 8, which include i) the lease of industrial premises and safe deposit boxes and ii) the lease of premises for the exercise of a business activity (commercial leases) under certain conditions. In particular, Article 8 par. 2 case (d) subcase (ii) of the VAT Code provides that the lease of premises for the exercise of a business activity to a taxable lessee, either independently or under a mixed contract, is...

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