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Tax Specialist Group
Corporate Tax Guide: Greece
Greece

Members:

The information is valid for the entire country except where indicated. For example, in the case of Malaysia, Labuan is part of Malaysia but has a special tax regime, so this is noted.
Greece – entire country
The corporate tax rate shown is the typical corporate tax rate that a domestic corporation owned by non-resident persons would pay. The tax rate does not include withholding tax on dividends, but does include a distribution tax shown separately if applicable. Certain countries have a low corporate tax rate, but charge an additional tax when a dividend is distributed. Because this tax is paid by the corporation, and not deducted from the amount of the dividend itself, it is not a dividend withholding tax. As a result, it typically cannot be reduced by an international tax treaty.
29%.

3% for agricultural cooperatives and producer groups.

40% discount for islands with a population of less than 3,100 residents.
The basis of taxation for a corporation will typically be one of:
  • World income (i.e. income from all sources)
  • Territorial (i.e. only income from within the jurisdiction)
  • Territorial and remittance (income earned within the jurisdiction and income remitted into the jurisdiction)
Other basis of taxation are possible, and, if applicable, they are noted.
World income.
Where non-resident corporation carries on business in a country, business profits may be subject to corporate tax. In addition, a branch profits tax may apply in lieu of dividend withholding tax. This branch profits tax applies to the after tax profits, typically at a fixed percentage. An international tax treaty may reduce the rate of branch profits tax, typically to the rate provided for dividend withholding.
Yes. 29%.
The common forms of business entity are noted. In addition, the entities which are flow through entities for U.S. tax purposes are indicated.
  • Commercial companies
  • Partnerships
  • Non-profit legal entities of public or private law, including all kinds of associations and foundations (any kind of profits gained in pursuit of the fulfillment of their mission are not subject to tax)
  • Cooperatives and associations
  • Incorporated associations of civil law and civil profit or non-profit companies
  • Joint ventures
  • Other legal entities
Capital gains may be fully taxed, partially taxed or not at all. In certain countries, an exemption, called the participation exemption, will apply to exempt from tax a capital gain from disposition of a substantial holding of shares of a subsidiary. Where a participation exemption is applicable, it is noted together with a summary of the main conditions.
  • Dividends: 15%
  • Interests: 15%
  • Royalties: 20%
Certain countries allow group taxation, otherwise known as consolidated tax filing. Here the tax returns of a group of corporations in the country may be combined together, which can be useful. If group taxation is permitted, it is noted along with the main conditions.
Several Greek corporations and their related entities, under specific conditions (i.e., their legal form, the type of relationship between the entities, etc.) have to draft consolidated financial sheets, so they are presented as one entity in accounting terms. As regards the taxation, group taxation is not permitted in Greece; they file a tax return separately.
Countries offer various kinds of special exemptions and incentives. Examples are a reduced tax rate, a tax holiday, a tax credit on the purchase of equipment, special accelerated deductions for deprecation, incentives for R&D, and various others. Here the major items are noted.
  • Exempted legal entities (holding companies and undertakings for collective investment in transferable securities, International organizations, etc.).
  • Reduced tax rate: the agricultural cooperatives and producer groups, for activities in islands with a population of less than 3,100 residents.
  • Intra-group dividends.
  • Mergers and divisions.
  • R&D: The scientific and technological research expenditure, including depreciation of equipment and instruments used for the purpose of execution of scientific and technological research, are deducted from the gross income of the business at the time of their realization, with a multiplier of 30%.
Many countries have thin capitalization rules which limit or deny the deduction of interest expense in certain circumstances. For example, if debt exceeds three times equity, a proportionate amount of interest expense may not be deductible. Limitations take various forms, restricting the interest expense deduction to a percentage of profit, deeming the debt to be equity and the interest to be a payment of dividends, and various other rules which may blend of these principles. Where a country has thin capitalization rules, they are briefly described.
Yes. Interest expenses are not recognized as deductible business expenses, to the extent that the excess interest costs exceed 30% of taxable earnings before interest, taxes, depreciation and amortization (EBITDA).
Many countries have transfer pricing rules. They very often follow the OECD guidelines and the arms length principle. Some countries have specific rules which apply in certain cases. In addition, some countries allow for a selection of the most appropriate transfer pricing methodology in the circumstances, while other countries follow a hierarchy of methods, with the CUP method (comparable uncontrolled price) often ranking first. The transfer pricing rules are briefly explained.
Yes. Greece has recently adopted the OECD Guidelines and the new ITC explicitly refers to OECD Guidelines as far as the interpretation and application of its provisions relating to inter-company transactions. The arm’s length principle is applied.
Many countries tax passive income earned in controlled foreign corporations (CFC’s) on an imputation basis while active income is not taxed. Such CFC rules are usually complex and vary significantly in what is considered passive income, and how foreign tax paid is taken into account. Some countries approach CFC rules on the basis of whether or not the foreign corporation is resident in a low tax jurisdiction or a tax haven. This may be done through a black list of countries.
The general overview of CFC rules is described in simple terms.
Yes.

Taxable income shall include the non-distributed income of a corporation or legal entity (which is tax resident in another country) provided that all of the following conditions are met:
  • The taxable person, individually or in combination with related parties, directly or indirectly holds shares, units, voting rights or holdings in the capital over 50% or is entitled to collect more than 50% of the profits of the said legal person or legal entity.
  • The said legal person or legal entity is taxable in a non-cooperating state or state with a preferential tax regime, namely a special regime that allows a materially lower level of tax than the general regime.
  • More than 30% of the net income before tax generated by the legal person or legal entity falls within one or more of the categories specified in paragraph 3 below.
  • It is not a company whose main class of shares is traded on a regulated market.
The above shall not apply to cases where the corporation or legal entity is a tax resident of a Member State of the European Union or a tax resident of a country that is a party to the EEA Agreement, unless the corporation’s or legal entity’s establishment or economic activities are an artificial arrangement devised for tax avoidance.

The categories of income that are taken into account for the purpose of applying the aforementioned, provided that more than 50% of the corresponding category of income of the legal person or legal entity comes from transactions with the taxable company or its related parties, are the following:
  • interest or any other income generated by financial assets
  • royalties or other income generated by intellectual property
  • dividends and income from the transfer of shares
  • income from moveable assets
  • income from real estate property, unless the taxable legal person’s or legal entity’s State would not be entitled to tax the income based on an agreement that has been concluded with the third country
  • income from insurance, banking or other financial activities
Profits repatriated by way of dividends from a subsidiary to a parent company are typically taxed in one of three ways:
  • The dividends are exempt of tax.
  • The dividends are deductible from taxable income, but not fully (90%, for example, of the dividend is deductible).
  • The dividend is taxable, grossed up to the pre-tax amount, and a foreign tax credit claimed for foreign taxes paid.
The applicable method is noted.
No. Only for undeclared profits and income. According to a recent Greek Law 4446/2016 (Articles 57-61), taxpayers who have not submitted a tax return, or who have submitted an incomplete or inaccurate tax return in previous years, can proceed voluntarily to the disclosure of undeclared profits and income until 31 May 2017 in order to be taxed at a lower tax rate.
Most countries allow a foreign tax credit based on a formula, typically net foreign income over the net income times taxes payable. This limits the foreign tax credit to roughly the domestic tax otherwise applicable to the foreign income. There are numerous variations and technical rules in the details of foreign tax credit calculations. Where a foreign tax credit is allowed, the general principles are described.
The income tax of legal persons and legal entities is calculated based on the annual tax return of the taxpayer and the amount of tax debt following deduction of: a) any tax withheld, b) any tax paid in advance, or c) any tax paid abroad.
14. Losses
Losses typically can be carried forwards for a period of years, and sometimes can be carried back. Losses may be segregated into capital losses and non capital losses.
Losses are being transferred to be offset against corporate profits successively in the next 5 fiscal years. The loss of the earlier year is offset in priority to the subsequent year loss.
It is not practical to list all of the tax treaties which a country has in a simple guide like this. Accordingly, a link is provided in each case to the tax treaties.
Some countries have entered into Tax Information Exchange Agreements (TIEA).
Treaties are more and more containing provisions that limit benefits (LOB provisions).
Yes.
  • Income Tax: 57
  • TIEA: 5 (Bermuda, Cayman Islands, Cook Islands, Gibraltar, Samoa)
  • LOB: none
Withholding tax rates vary considerably from treaty to treaty, and countries may have domestic exemptions applicable in certain circumstances (for example copyright royalties, interest paid to arm’s length persons, etc.). A table shows the typical rates but cannot adequately summarize all of the details. The applicable treaty should be consulted.
Dividends15%
Interests15%
Royalties10%
Fees for technical services, management fees, consulting fees and other fees for similar services of an individual20% (exemptions 3%)
The insurance indemnity10% - 20%
Some countries allow for the selection of year-end while other countries specify a particular year-end which all business entities must have. Normally the taxation year cannot exceed 12 months. Where it can exceed 12 months, this is noted.
The tax year is from 1 January to 31 December.
This is the due date for filing a tax return. Where extensions are available, this is noted.
The tax return shall be submitted by the last day of the sixth month after the end of the tax year.
The typical tax instalment requirements are noted.
Yes, monthly instalments 4, 6, 12 depending on the tax in question are usually provided.
This is the date when the corporate tax owing for the year must be paid. It may be different from the tax return filing due date.
The tax is paid on the date/period specified by decision of the Secretary General.
(100% of advance tax for the current tax year for most businesses.)
This is the period after which the tax department cannot in normal circumstances reassess a taxation year. It is sometimes referenced to the end of the taxation year and sometimes to the date of the first assessment of that taxation year.
Yes. The right of the Tax Authorities to collect taxes and other revenues is barred after 5 years from the end of the year in which they gained an enforcement order.

For tax evasion cases, the limitation period of public claims is 20 years.
If a country has exchange controls, this is noted, together with the main requirements.
Capital controls were introduced in Greece in June 2015, when the European Central Bank decided not to further increase the level of the Emergency Liquidity Assistance for Greek banks, because Greece had not come to an agreement with its European creditors regarding the further extension of its bailout extension period.

So, some of the controls that remain enforced to avoid the collapse of the Greek bank system are the following:
  • Controls on bank transfers
  • Limits on cash withdrawals
  • Limits on shopping abroad, etc.
23. VAT
A VAT tax system typically provides that the supply of goods and services is classified as taxable, tax exempt, or zero rated. Where a business is engaged in an activity which is taxable, it must charge VAT on its revenue, and can claim a refund of VAT on its expenditures. Where the activity is exempt, it does not charge VAT on its revenue, and cannot claim back VAT paid. Where the entity is engaged in activities which are zero rated (typically agriculture, food services and exports), then it can claim back VAT which it has paid on its expenditures, and does not charge VAT on its revenue.
If a country has a typical VAT system, this is noted. If a country has no VAT system but a sales tax system, this is indicated. Some countries may have a mixture, and taxes may apply at different levels (federal and state for example).
Yes, 24%; provincial rates vary from 6% to 13%.
Stamp duty, or land transfer tax, can apply on such things as the transfer of shares, land, or the issuance of bonds or debentures. This is described together with the applicable rates.
Generally for loans or other agreements between legal entities. Rate varies from 1,2% to 3,6%
If capital tax is payable, this is described. Capital tax may apply in specialized industries, such as banking and insurance, even if a country does not generally apply a capital tax to corporations.
  • Dividends: 15%
  • Interests: 15%
  • Royalties: 20%
Where significant, other taxes are noted.
Payroll taxes, worker compensation, etc.
Anti-Avoidance Rules take many forms, the most common ones are a general anti-avoidance rule, treaty shopping limitations, the requirement for economic substance (or a business purpose in carrying out transaction) and specific anti-avoidance rules for particular purposes. A very brief overview of the anti-avoidance rules is described.
Yes. GAAR. According to Article 38 of the Tax Procedure Code, which is a general provision recently introduced in Greek Tax Law, an “artificial arrangement” or set of arrangements made by the taxpayer can be considered under the Tax Authorities’ discretion as a tax avoidance action(s), specifically if the result is non-taxation and non-payment of tax either in whole or in part.
Where a non-resident person holds shares of a corporation established in the country listed, the capital gain which results may be taxable or not taxable depending on the circumstances and, possibly, the existences of an international tax treaty. The general rules are noted.
Sale of shares or Greek business assets is taxable at 15%.
Where a corporation is acquired through the purchase of shares, sometimes a step up is allowed so that the cost of its assets can be revalued. The main rules are briefly summarized.
Appreciated assets, like real estate, businesses or shares for tax purposes upon acquisition, can be determined to be the higher market value of the asset at the time of acquisition. In cases of the transfer of the above assets, the step up procedure is applied in Greece and a special tax on this goodwill is also provided.
In some countries, rulings are commonly used (and sometimes even required). In other countries the system is either unavailable or not commonly used except in special circumstances.
Not in the form of advanced tax rulings. Greece uses the term "individual responses" instead of "tax rulings". Taxpayers have the right to file a petition to the Tax Authorities requesting the issuance of individual responses ("rulings") on any tax issue.
31. Other
Other important aspects of the tax system are noted.
N/A