GREECE Law and Practice Contributed by: Betty Smyrniou, Bahas, Gramatidis & Partners
2.1.5 Taxes/Duties Payable for Physical Execution of a Lease There are no taxes/duties payable for physically exe - cuting a lease in Greece with regard to a domestic party or as a consequence of an original or copy of a lease being brought to Greece either physically or electronically. However, income resulting from a lease is subject to taxation in the case of a Greek tax-resident lessor and matters of deductions of taxes are subject to double taxation treaties. Leasing of an aircraft designated to be used by air - lines predominantly for international commercial air transport and/or that is subject to VAT exemptions is usually exempt from VAT. 2.1.6 Licensing/Qualification of Lessors A lessor does not need to be licensed or otherwise qualified in Greece to do business with a domestic lessee. 2.2 Lease Terms 2.2.1 Mandatory Terms for Leases Governed by English or New York Law No mandatory terms are required in a lease (or ancil - lary documents thereto), governed by either English or New York law, that would not typically already be included. 2.2.2 Tax and Withholding Gross-Up Provisions Tax and other withholding gross-up provisions are permissible and enforceable. 2.2.3 Parts Installed or Replaced After a Lease’s Execution A lease can cover parts that are installed or replaced on an aircraft or engine after its execution, especially if this is provided in the lease agreement. 2.2.4 Risk of Title Annexation There are legal and practical risks associated with aircraft engines becoming attached to other aircraft. These risks are reduced in the case of registered spare engines.
The lease should be carefully drafted in order to mini - mise the risk of title annexation in respect of aircraft engines installed on an airframe. Accordingly, the lease may provide for a separate recognition-of-rights agreement to be entered into in favour of the lessor/owner/security trustee. 2.2.5 Recognition of the Concepts of Trust/Trustee The concept of a trust and the role of an owner trustee is governed by the law applicable to the trust or the lease. The concepts of a common-law trust and an owner trustee of a common-law trust are not recog - nised under Greek in rem law. Greece has not ratified the Hague Convention on the Law Applicable to Trusts and on their Recognition. However, a statutory trust with its own legal personali - ty and an owner trustee of such trust are recognised in such capacities (owner trustee as owner), but leases with owner trustees are avoided because they cause complexity. 2.3 Lease Registration 2.3.1 Notation of Owner’s/Lessor’s Interests on Aircraft Register The certificate of registration mentions both owner and operator. The aircraft registry records the legal owner as well as the lessor and lessee. The registra - tion of the ownership and recording of the lease in the aircraft registry is necessary for the completion of the registration of the aircraft. 2.3.2 Registration If the Owner Is Different From the Operator If the operator does not own the aircraft, the aircraft cannot be registered in Greece in the operator’s name. However, it can be registered in the owner’s name, even if the owner is not the operator. 2.3.3 Aircraft/Engine-Specific Registers There are no separate registers for leases concern - ing aircraft and engines. However, there are separate registers for aircraft and engines.
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