GREECE Trends and Developments Contributed by: Maria Zoupa, Daphne Cozonis, Ioanna Tapeinou and Diana Tsourapa, Zepos & Yannopoulos
subject to corporate income tax upon any subse - quent distribution or capitalisation of this amount, unless such distribution or capitalisation takes place within the two-year clawback period. In any event, given the lack of precedent in the appli - cation of this recent tax neutrality regime, any relevant reorganisation should be planned carefully in order to prevent issues arising. For example: • Branch of Activity: reorganisations involving branches of activity can be implemented subject to meeting specific definitions set in the law delineat - ing the definition of branch of activity. • No Option for Retroactive Tax Effect: Corporate law allows the merger/demerger plan to desig - nate an “effective date” from which transactions are deemed, for accounting purposes, to have been carried out on behalf of the receiving entity. The guidance, however, vests tax effects strictly to legal completion. The lack of a retroactive tax effect option could be problematic in cross-border restructurings, where synchronised effective dates are needed to avoid mismatches and conflicts with the corporate law flexibility. • Interest Limitation Rules: Despite the existence of guidance under the previously applicable tax-neu - trality regimes as to the treatment of non-deducted exceeding borrowing costs under interest limitation rules in case of corporate reorganisations, the cur - rent guidance does not replicate the same treat - ment and therefore this matter should be carefully reviewed. Tax Authorities’ Published Guidance in Relation to Law 5177/2025 on Digital Transaction Duty Continuing the trend of providing clarity on the implementation of recent tax changes, the Greek tax authorities have issued – though after a rather long wait – guidance on the recently introduced digital transaction duty. The guidance addresses, among others, the following issues: • Where the contracting parties to a main agree - ment are non-Greek-resident entities or permanent establishments, the main agreement falls outside the scope of digital transaction duty, and no such duty applies to any relevant ancillary agreements
with Greek counterparties. However, particular attention should be given to situations where the relevant main agreement was executed before 1 December 2024. • Apart from loans, the duty does not apply to all forms of credit. Transactions within the scope of VAT or property transfer tax, such as financial leas - ing, factoring, derivatives, repos, securities lending, and sales on credit are excluded. • Bond loans issued by foreign companies (within or outside the EU/EEA/EFTA) are exempt from the duty. • Cash pooling arrangements fall within the notion of credit and, depending on their economic char - acteristics, are subject to the duty either as loans, cash facilities, or current accounts. • For conditional, contingent, or term-based agree - ments, tax liability arises when the condition is fulfilled or the term lapses. Despite the welcome clarity, types of transactions which should be given particular attention as to their treatment due to some open issues include settlement agreements, assignments of receivables and assump - tions of debts as well as debt waivers. Pillar Two Implementation Status Through Law 5100/2024, which came into force on 5 April 2024, Greece transposed into Greek law Council Directive (EU) 2022/2523 of 14 December 2022 on ensuring a global minimum level of taxation for multi - national enterprise groups and large-scale domestic groups in the EU (the “Directive”). The Directive con - veyed into EU law the Pillar Two Global Anti-Base Ero - sion Rules (GloBE) developed by the OECD as part of addressing the tax challenges arising from the digitali - sation of the economy in the context of the OECD/G20 Base Erosion and Profit Shifting Project (BEPS). The Greek law follows the Directive almost verbatim. Since the transposition of the Directive, no further legislative changes have taken place in Greek law. The relevant local compliance framework is to be formulated, inter alia, through decisions of the Minister of Economy and Finance and of the Independent Authority for Public Revenue, to be issued pursuant to the authority con - ferred by the law. The first relevant filing and notifica - tion deadlines are to expire on 30 June 2026.
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