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Taxation

Greece is a member of the European Economic Community and has signed double taxation treaties with more than 55 countries.

These countries include among others Cyprus, Bulgaria, Romania, Italy, China, Germany, France, Malta, the United Arab Emirates, the United Kingdom, Canada, Turkey, etc. The Most important forms of doing business in Greece are:

  • Societe Anonyme
    • Minimum Capital: 25,000 euros
    • Corporate tax: 24%
    • Dividend tax: 5%
    • Extra yearly tax contribution: 1000 euros per year
    • Insurance of the Managing Director only with participation in the company> 3%
  • Limited Liability Company
    • Minimum capital : does not exist
    • Corporate tax: 24%
    • Dividend tax: 5%
    • Solidarity Contribution: 1000 euros per year
    • Insurance of all partners
  • Private Capital Company
    • Minimum. Chapter: 1 euro
    • Corporate tax: 24%
    • Dividend tax: 5%
    • Solidarity Contribution: 1000 euros per year
    • Insurance only of the administrator or the sole proprietor
  • Partnerships
    • Minimum Capital: does not exist
    • Corporate tax: 24%
    • Dividend tax: 0%
    • Solidarity Contribution: 1000 euros per year
    • Insurance of all partners
  • Individual Business
    • Minimum. Chapter: does not exist
    • Corporate tax: 9% -45%
    • Dividend tax: 0%
    • Solidarity Contribution: 650 euros per year
    • Insurance of all partners

Corporate income tax rate
The corporate income tax rate for companies, partnerships, cooperatives, joint ventures and other legal entities history data for the last 4 years is as following:

  • 29 % on income for the 2017 tax year
  • 29 % on income for the 2018 tax year
  • 24 % on income for the 2019 tax year
  • 24 % on income for the 2020 tax year

Withholding tax rates

On dividends paid to non-resident companies
In general, distributed dividends paid to non-resident companies are subject to withholding tax at the rate of 5 percent.

Double tax treaties may provide a withholding tax exemption or a lower withholding tax rate.

Withholding tax does not apply to outbound dividends paid by a Greek subsidiary to an EU company, provided that certain conditions are met pursuant to the EU Parent-Subsidiary Directive 2011/96/EU.

On interest paid to non-resident companies
In general, withholding tax of 15 percent applies to interest paid to non-resident companies.

Double tax treaties may provide a withholding tax exemption or a lower withholding tax rate.

Withholding tax does not apply to interest paid between associated companies of different EU Member States provided that certain conditions are met pursuant to EU Directive 2003/49/EC.

Certain exemptions apply to interest on government bonds and interest on loans from credit institutions.

On patent royalties and certain copyright royalties paid to non-resident companies
A withholding tax rate of 20 percent applies to royalties paid to non-resident companies with no permanent establishment in Greece. However, withholding tax does not apply to royalties paid to non-resident companies with a permanent establishment in Greece.

Double tax treaties may provide a lower withholding tax rate or a withholding tax exemption.

Withholding tax does not apply to royalties paid between associated companies of different EU Member States provided that certain conditions are met pursuant to EU Directive 2003/49/EC.

On fees for technical services
In general, a withholding tax rate of 20 percent applies to fees for technical projects. Specific provisions apply to fees paid in respect of technical projects in the public domain.

Fees for technical services paid to foreign EU companies are exempt from withholding tax.

On other payments and management fees
In general, withholding tax 20 percent applies to management and consulting fees.

However, management and consulting fees paid to non-resident companies with no permanent establishment in Greece, as well as to non-resident companies established in another EU Member State, are exempt from withholding tax.

Branch withholding tax
N/A

Holding rules

Dividend received from resident/non-resident subsidiaries
Participation exemption method (100 percent):

  • The distributing company is a tax resident of an EU Member-State and is included in Annex I of Directive 2011/96/EU;
  • Participation requirement: the receiving resident company holds at least 10 percent of the share capital or voting rights of the distributing company;
  • Minimum holding period: at least 24 months (specific provisions apply);
  • Taxation requirement: subject-to-tax requirement pursuant to Annex I of Directive 2011/96/EU.
  • If the above conditions do not apply, dividends received from resident/non-resident subsidiaries cannot benefit from the participation exemption. In such cases, the credit method in the Greek Income Tax Code generally applies.

Capital gains obtained from resident/non-resident subsidiaries
Capital gains arising from the transfer of shares (either listed or non-listed) and realized by Greek companies or foreign companies with a permanent establishment in Greece, are treated as business income and are taxed at the standard corporate income tax rate.

Special provisions apply.

Tax losses
Tax losses may be carried forward for five (5) years from the end of the tax year in which they arose.

As an anti-avoidance rule, tax losses cannot be carried forward if (a) during the tax year, the direct or indirect participation or the voting rights in a legal entity changed and exceeded the percentage of 33 percent and (b) during the same tax year or the tax year following the change in participation/voting rights, the entity’s business activity changed by more than 50 percent of its turnover in relation to the previous tax year.

On the transfer of land and buildings
VAT at the rate of 24 percent is imposed on the first transfer of new buildings (whose construction licenses were issued or amended after January 1, 2006), provided that such buildings had not yet been used prior to their transfer (exemptions may apply for the purchase of a primary residence).

Following this first transfer, every subsequent transfer is subject to real estate transfer tax at an effective rate of 3.09 percent (exemptions may apply for the purchase of a primary residence).

Stamp duties
Stamp duty (ranging from 1.2 percent to 3.6 percent) applies to certain transactions such as loans, assignments, etc.

Real estate taxes
The ownership of real estate is subject to Unified Real Estate Ownership Tax (UREOT), which consists of a main tax and a supplementary tax and is determined by the Tax Authorities on the basis of E9 returns on which taxpayers must declare all their real estate

Controlled Foreign Company rules
Yes

Transfer pricing rules

General transfer pricing rules
Intra-group transactions should follow the arm’s length principle . Greek entities/branches must prepare a Transfer Pricing Documentation File documenting all intercompany transactions and submit a list of these transactions to the Ministry of Finance electronically, provided that the total value of the intercompany transactions or transfer of business operations exceeds:

  • EUR 100,000 cumulatively per tax year, if the gross revenue of the taxpayer does not exceed EUR 5,000,000, or
  • EUR 200,000 cumulatively per tax year, if the gross revenue of the taxpayer exceeds EUR 5,000,000.

BEPS Action 13 in relation to the Country-by-Country Reporting obligations has been transposed into Greek law.

General Anti-Avoidance rules (GAAR)
Yes. Business transactions/transformations etc. should be supported by valid and solid business considerations to mitigate the risk that the tax authorities might consider them as having been carried out for tax avoidance purposes.

Specific AntiAvoidance rules/Anti Treaty Shopping Provisions
Transfer Pricing, Controlled Foreign Company, Thin Capitalization rules and other

VAT
The standard rate is 24 percent. There are reduced rates of 13 percent and 6 percent for certain goods/services. For the first half of 2019, the above rates can be reduced by 30 percent for supplies of goods/services in certain Aegean Islands (subject to conditions).