Definition of a permanent establishment according to the new Greek Income Tax Code
By virtue of article 6 of the Greek Income Tax Code, as recently codified by law 4172/2013 (23.7.2013), a new definition of a permanent establishment is provided, as follows.
Article 6 Permanent establishment:
1. “Permanent establishment” means the specific place of business through which the undertaking carries out business in whole or in part.
2. The term “permanent establishment” includes mostly:
(a) an administration site,
(b) a branch,
(c) an office,
(d) a plant,
(e) a workshop, and
(f) a mines, an oil or gas source, a quarry or any other place of natural resource mining.
3. The worksite or a construction or assembling project or supervision activities related thereto shall be considered to constitute a permanent establishment insofar as it lasts for more than three (3) months.
4. Irrespective of the above provisions hereof, the term “permanent establishment” is not regarded as including:
(a) using installations exclusively for storage, exhibition or delivery of goods or merchandises belonging to the undertaking;
(b) keeping stock of goods or merchandises belonging to the undertaking exclusively for storage, exhibition or delivery;
(c) keeping stock of goods or merchandises belonging to the undertaking exclusively for processing by another undertaking;
d) maintaining a specific place of business exclusively for purchasing goods or merchandises or collecting information for the undertaking;
(e) maintaining a specific place of business exclusively for conducting any other preparatory or auxiliary activity for the undertaking;
(f) maintaining a specific place of business exclusively for combining the works referred to above under (a) to (e), provided that the total activity of a specific place of business resulting from the said combination is preparatory or auxiliary.
5. Irrespective of the provisions of paragraphs 1 and 2, when a person, except for the independent agent to which paragraph 6 applies, acts on behalf of the undertaking and has been granted authorisation, and exercises such authorisation domestically, to enter into agreements in the name of the undertaking, that undertaking shall be considered as having a permanent establishment in Greece relating to the activities undertaken by that person on its behalf, unless the activities carried out by the said person are limited to those laid down in paragraph 4, which, even if carried out through a specific place of business, do not render that place a permanent establishment under the provisions of this paragraph.
6. An undertaking may not be regarded as having a permanent establishment in Greece, if its activity is limited to the execution of works via a broker, a general commission agent or any other independent agent, insofar as these persons act within the context of their usual business.
7. The fact that an undertaking that is a tax resident in Greece controls or is controlled by another undertaking residing in another country or carrying out business through a permanent establishment or otherwise in that other country does not render, by itself, the former a permanent establishment of the latter.