GREECE Law and Practice Contributed by: Maria Zoupa, Daphne Cozonis, Ioanna Tapeinou and Diana Tsourapa, Zepos & Yannopoulos
Dividends Under domestic law, 5% withholding tax applies to dividends. Dividends distributed to qualifying EU par - ent companies are exempt from any withholding tax, provided that: • the parent company participates in the subsidiary with a minimum holding of 10% in the capital or voting rights for at least 24 months; • the beneficiary company receiving the dividend payment is included in the list of companies referred to in Annex I Part A of the EU Parent–Sub - sidiary Directive; • the beneficiary company is tax resident in an EU member state and, under the terms of an income tax treaty concluded with a third state, is not con - sidered resident for tax purposes outside the EU; and • the beneficiary company is subject to one of the taxes listed in Annex I, Part B of the Directive (with - out the possibility of an option or of being exempt) or to any other tax that may be substituted for any of those taxes. Until completion of the minimum holding period, a bank guarantee for the amount of withholding tax that would otherwise be due can be deployed instead of payment of the withholding tax and a posterior refund claim. A special anti-avoidance rule prohibits the withhold - ing tax exemption on the above-mentioned qualify - ing dividend payments if the exemption is claimed in the context of artificial arrangements that are not put in place for valid commercial reasons reflecting eco - nomic reality but, rather, are aimed mainly at obtaining a tax advantage. Interest and Royalties Under domestic law, 20% withholding tax applies to Greek-source royalties and 15% withholding tax applies to Greek-source interest. Interest and royalties paid to qualifying EU associ - ated companies are exempt from any withholding tax, provided that:
• the beneficiary company receiving the interest or royalties participates in the payor with a minimum holding of 25% in the capital or voting rights for at least 24 months, or the payor participates in the beneficiary company with the same minimum holding, or a third company participates in the payor and the beneficiary with the same minimum holding; • the beneficiary is included in the list of companies referred to in the Annex to the EU Interest Royalties Directive; • the beneficiary is tax resident in an EU member state and is not considered resident for tax purpos - es outside the EU under the terms of an income tax treaty signed with a third state; and • the beneficiary company is subject to one of the taxes listed in the EU Interest Royalties Directive (without the possibility of an option or of being exempt) or to any other tax that may be substituted for any of those taxes. Until completion of the minimum holding period, a bank guarantee for the amount of withholding tax that would otherwise be due can be deployed instead of payment of the withholding tax and a posterior refund claim. Listed Corporate Bonds Interest payments effected as of 1 January 2020 to non-resident individuals and legal entities that do not maintain a permanent establishment in Greece are exempt from interest withholding tax insofar as such interest is on corporate bonds listed on trading venues within the EU or on organised markets outside the EU, provided such markets are regulated by an authority accredited by the International Organization of Securi - ties Commissions. 4.2 Key Treaty Jurisdictions for Inbound Investment Based on data from the Bank of Greece, the primary tax treaty countries from which foreign investors make investments in local corporate stock or debt are Ger - many, France, Switzerland, Cyprus, Italy, the USA, Luxembourg, the Netherlands, and the UK.
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