GREECE Law and Practice Contributed by: Maria Zoupa, Daphne Cozonis, Ioanna Tapeinou and Diana Tsourapa, Zepos & Yannopoulos
7. Anti-Avoidance Provisions 7.1 Overarching Provisions
(d) income from financial leasing and income from insurance, banking and other financial activi - ties; and (e) income from companies that undertake invoic - ing and realise income from sales and services and income from goods and services pur - chased from and sold to associated enterpris - es, adding no or little economic value. CFC rules do not apply to companies or PEs resident in EEA member states, provided that such entities car - ry out a substantive economic activity supported by staff, equipment, assets and premises, as evidenced by all relevant facts and circumstances. In such cas - es, the tax authorities bear the burden of proving the absence of a substantive economic activity. In the case of distribution by a CFC of profits that are included in the taxable basis of the local corpora - tion, any CFC income taxed in a previous fiscal year is deducted from the relevant taxable basis. 6.6 The Substance of Non-Local Affiliates There are no uniform local rules related to the sub - stance of non-local affiliates. Guidelines can be found on a case-by-case basis with regard to certain spe - cific anti-avoidance provisions. In addition, national legislation transposing EU Directives must also be interpreted on the basis of the CJEU’s case law. Fac - tors that can be taken into account are local manage - ment, physical presence, full-time employees, active VAT number and taxation. Financial statements and information about the business organisation can also be taken into account, along with the other factors. 6.7 The Sale of Shares in Non-Local Affiliates Gains on the sale by local corporations of shares in non-local affiliates are fully included in the taxable basis for income tax purposes, with the exception of gains on the disposal of shares in qualifying subsidiar - ies in respect of which legal persons are exempt under certain conditions (see 2.7 Capital Gains ).
A general anti-abuse rule exists under Greek legisla - tion as part of the wider measures to combat tax eva - sion or avoidance. Such rule incorporates part of the EU Anti-tax Avoidance Directive into Greek domestic law. The rule allows tax authorities – having regard to all relevant facts and circumstances – to ignore an arrangement or a series of arrangements that, having been put in place for the main purpose of obtaining a tax advantage that defeats the object or purpose of the applicable tax law, are not genuine. An arrange - ment is not considered genuine if it is not put in place for valid commercial reasons that reflect economic reality. In such cases, the tax liability is determined as the tax liability that would arise in the absence of such an arrangement. In accordance with the relevant guidelines, the burden of proof is on the tax authori - ties. Moreover, no avoidance is considered to exist solely by reason of a taxpayer seeking to reduce its tax burden. The rule has been relied upon at certain times by the tax authorities to assess taxes, and certain decisions in this respect issued by the Dispute Resolution Direc - torate of the Independent Authority for Public Rev - enues can be used for interpretation. No substantial relevant jurisprudence by the Supreme Court exists. A specific anti-abuse rule applies in respect of tax- neutral corporate reorganisations such as mergers, share-for-share exchanges, spin-offs and demergers. According to this rule, tax benefits are withdrawn in whole or in part where the principal objective (or one of the principal objectives) behind the reorganisation is tax evasion or avoidance. In addition, a special anti-avoidance rule prohibits exemptions in respect of qualifying dividends paid or received if the exemption is claimed in the context of artificial arrangements that are not put in place for val - id commercial reasons reflecting economic reality but, rather, are aimed mainly at obtaining a tax advantage.
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