GREECE Law and Practice Contributed by: Maria Zoupa, Daphne Cozonis, Ioanna Tapeinou and Diana Tsourapa, Zepos & Yannopoulos
2.5 Deduction of Interest According to a rule transposing part of the EU Anti-Tax Avoidance Directive into Greek domestic law, subject to a de minimis threshold of EUR3 million annually, “exceeding borrowing costs” are not deductible by local corporations and local PEs of non-resident enti - ties to the extent that they exceed 30% of EBITDA – with a possibility to carry forward the non-deductible portion without any time limitation. “Exceeding bor - rowing costs” is defined as the amount by which the otherwise deductible borrowing costs of a company exceed taxable interest revenue and other economi - cally equivalent taxable revenue. Companies that are part of consolidated groups as per Greek Generally Accepted Accounting Practice (GAAP) may deduct all of their exceeding borrowing costs if the ratio between their share capital and total assets is equal to (or higher or lower by no more than) 2% of the group ratio, provided that the method of valuation of all assets and liabilities is the same as in the consolidated financial statements. These com - panies can also deduct exceeding borrowing costs up to the amount arising from the application to their EBITDA of the group ratio of exceeding borrowing costs (in respect of lending from third parties) over group EBITDA. The above-mentioned interest limitation rules do not apply to several types of financial undertakings, such as credit institutions, insurance companies, and spe - cific institutions for occupational retirement. Regard - ing related-party transactions, this rule is applied after any transfer pricing adjustment. Another restriction on the deduction of interest is that the portion of interest expenses corresponding to any rate exceeding the interest rate for credit lines to non-financial corporations referred to in the most recent Bulletin of Conjunctural Indicators of the Bank of Greece (as at the time of the loan) is not deductible. This limitation does not apply to interest on bank loans or bond loans, nor to interest paid to related parties for which transfer pricing rules shall apply. 2.6 Consolidated Tax Grouping There is no consolidated tax grouping regime in Greece.
2.7 Capital Gains Capital gains from the disposal of assets (includ - ing transfer of shares in other corporations) are ful - ly included in the taxable basis of corporations for income tax purposes in the fiscal year in which they are realised. Greek legal persons and Greek PEs of non-resident EU/EEA legal persons are exempt from tax on capital gains arising from the transfer of shares in EU Par - ent–Subsidiary Directive-qualifying subsidiaries (see 6.3 Dividends From Foreign Subsidiaries ), including Greek subsidiaries insofar as they hold at least 10% participation in those subsidiaries for a minimum hold - ing period of 24 months. In addition, as of fiscal year 2025, (i) Greek legal persons disposing of shares in qualifying non-EU subsidiaries (see 6.3 Dividends From Foreign Subsidiaries ) and (ii) Greek PEs of non- resident, EU/EEA legal persons transferring shares in non-Greek subsidiaries are exempt, under the same conditions, from tax on capital gains arising from such transfers. Under a grandfather clause, losses arising from the transfer of shares are deductible for tax purposes: (i) as of 1 January 2020 when they arise on the disposal of shares in qualifying EU subsidiaries; and (ii) as of 1 January 2025 when they arise on a disposal of shares in qualifying non-EU subsidiaries, and in both cases they must be incurred up to 31 December 2026. Tax treatment applies to the extent that the losses were reflected in financial-statement valuations performed up to 31 December 2019 for qualifying EU subsidiar - ies and up to 31 December 2023 for qualifying non- EU subsidiaries, and also on condition, in both cases, that they are recorded in the taxpayers’ books or are reflected in the financial statements audited by certi - fied public accountants. By virtue of Law 5162/2024, which provided tax incen - tives on corporate reorganisations, and replaced all previously applicable tax frameworks of Laws 1297/1972, 2166/1993 as well as of Articles 52–56 of L. 4172/2013, capital gains derived from certain quali - fying corporate reorganisations – for example, merg - ers, divisions, partial divisions, transfers of assets and exchanges of shares – are exempt from tax at the time
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