Tax Law

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Rules for Controlled Foreign Companies (CFCs)

The provisions of Article 66 of the Greek Income Tax Code (ITC) were amended as of 01.01.2019 by virtue of the provisions of Article 12 of Law 4607/2019 for the purpose of harmonization with Council Directive 2016/1164/EU (ATAD) and implementation of the BEPS results (final report - action 3), in order for Member States to limit the artificial diversion of income to companies and permanent establishments established in low-tax countries within and outside the European Union. In particular, the new provisions for "Controlled Foreign Companies", which relate to the inclusion in the taxable income of non-distributed income of a legal person...

07 Jul 2022

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Joint bank accounts – Inheritance and gift tax issues

Based on the recent law 4916/2022, article 25 par. 2 case (c) of the Greek Inheritance, Gifts and Parental Gifts Taxation Code – L. 2961/2001 (hereinafter referred to as “the Code”) was amended and extends the exemption from Greek inheritance taxation for deposits maintained in joint bank accounts including cash deposits and all kinds of securities that are held not only in bank accounts held in Greece but also abroad, with the exclusion of non-cooperative jurisdictions. It is noted that, in order for the exemption to apply, the contract with the foreign bank should include a clause providing that after the...

14 Jun 2022

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Greek tax issues related to the granting of a loan by a foreign company to its Greek tax-resident (individual) shareholder

Stamp duty issues On the basis of the territoriality principle, a loan concluded and executed abroad is exempt from Greek stamp duty, provided the following conditions are met: a) the loan agreement is concluded and signed by both parties abroad (not before a Greek Consulate Authority) e.g. before a notary public or attorney at law; b) the loan agreement must not create any executable obligations in Greece e.g. it should not be secured through mortgage or property located in Greece; c) any obligation to grant the loan and repay capital and interest must be executed abroad; this practically means that...

19 May 2022

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The principle of retroactive application of the lighter administrative sanction for breach of tax legislation under Greek law

(Legal Council of the state 2319/2021) The principle of retroactive application of the lighter administrative sanction (and more generally, the most favorable legal provision imposing administrative-sanctions) for violation of the tax legislation, constitutes a general principle of Greek tax law founded in the constitutional provisions of equality (art.4 par.1) and -in terms of pecuniary sanction- of the principle of proportionality in the restrictions of the right to property (art.25 par.1 q. d’). These constitutional principles bind the legislator when it comes to the regulation, by means of provisions of transitional law, of cases pending before the Administration or before administrative courts...

21 Apr 2022

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Tax treatment of benefits in kind

Granting of free shares (“Shares award plans”) [article 42A par. 3 of L.4172/2013, hereinafter as “ITC”] First, it should be noted that, according to article 14 par.1 of ITC, the benefit in kind in the form of granting of free shares that is obtained by an individual from a legal person/entity in the context of plans in which the achievement of specific objectives or the occurrence of a specific event is set as a condition for this granting, is exempted from the calculation of income from employment. Therefore, at the time of granting, the individual does not obtain income...

15 Mar 2022

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Tax treatment of dividend in kind

The Greek Income Tax Code (ITC) does not explicitly refer to the case of distribution of dividends in kind or its taxation. The definition of “dividends”, as per article 36 of the Greek ITC includes any income deriving from shares, securities or other types of rights in the participation of profits that do not constitute claims from debts, as well as any income from other corporate rights such as parts, including pre-dividends and numerical reserves, participations in profits of personal companies, distributions of profits from any type of legal entity as well as any similar distributed amount. The distribution of dividends in...

11 Feb 2022

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Special VAT exemption regime for small businesses

The Greek VAT legislation provides for a special VAT exemption regime for small businesses, which is regulated in article 39 of L. 2859/2000-Greek VAT Code, which has been amended since 1/1/2019 in order to improve and simplify the regime as well as fully harmonize it with the EU VAT law. Moreover, Circular E. 2012/2019 was issued communicating the new provisions and giving various clarifications on the regime in the context of the amended article 39. Herein below we provide the main points of the special VAT exemption regime for small businesses: The regime is optional; the new (amended) provisions aim at...

11 Feb 2022

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VAT treatment of educational services

For the assessment of the VAT treatment of educational services (such as teaching and training services), the first step is to determine the place of supply of those services for VAT purposes, based on their nature/classification, the VAT status/capacity of the recipient of the services as well as the way the services are provided (e.g. online). Following the determination of the place of supply, and should this be Greece, the next step would be to examine whether the services could benefit from the VAT exemption applicable to educational services. Should this be the case, even if the place of supply...

24 Nov 2021

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Professional leisure yachts – VAT exemption for purchase/import