GREECE Law and Practice Contributed by: Fotodotis Malamas, Bernitsas Law
suspension of VAT and capital gains tax, encourages individuals and legal entities to invest in real estate. In correlation with the strong growth of the Greek economy (2.3% for 2024), house prices increased in 2024 on a weighted average by approximately 8.7%. 1.6 Transparency and Increased Global Reporting By way of Law 4174/2013 determining the Code of Tax Procedure, which came into force on 1 January 2014, Greece introduced a general anti-avoidance clause into its tax system, on the basis of which the tax administration can ignore any “non-genuine” arrangement deemed to be aimed at tax avoidance or tax evasion and leading to a tax benefit for the taxpayer when assessing tax due. An arrangement is considered non-genuine if it lacks “economic or com - mercial essence”. In the year 2024, Law 5104/2024 replaced Law 4174/2013 (New Code of Tax Procedure), including the respective general anti-avoidance clause. Non-Cooperative Jurisdictions and Tax Consequences The Greek Ministry of Finance issues an annual list of jurisdictions that are deemed to be non-cooperative, and a list of jurisdictions that are deemed to have pref - erential tax regimes. Non-cooperative jurisdictions are generally non-EU countries that have not entered into an agreement on administrative co-operation in tax matters with Greece and another 12 countries. According to the Income Tax Law, countries with a preferential tax regime are those with a statutory corporate income tax rate lower than 60% of the Greek rate. The tax consequences of transacting business with a resident of a non-cooperative jurisdiction or one with a preferential tax regime are as follows: • dividends received from a subsidiary located in a non-cooperative country do not qualify for benefits under the participation exemption; and • for the purposes of Greece’s controlled foreign company (CFC) rules, the undistributed income of a foreign legal entity will be considered as taxable
income of a Greek resident that controls the foreign entity if, inter alia, the foreign entity is resident in a non-cooperative country or in a non-EU country that has a preferential tax regime. For EU countries with a preferential tax regime, the CFC rules apply only if the scheme is a wholly non- genuine arrangement, the purpose of which is to avoid or evade tax. Multilateral Competency Agreements Greece has ratified the OECD Multilateral Compe - tent Authority Agreement on Automatic Exchange of Financial Account Information by way of Law 4428/2016 (the “Agreement”). In accordance with the Agreement, Greek financial institutions or Greek branches of international financial institutions are under an obligation to report account information regarding interest, dividends, account balances and sale proceeds from financial assets to the Ministry of Finance, and to follow certain procedures, consistent with the reporting and due diligence procedures set out in the OECD Common Reporting Standard (CRS). The Greek competent authorities are obliged to auto - matically exchange this information annually with the competent authorities in signatory countries where account holders are resident. Law 4378/2016 has already incorporated into domes - tic legislation Council Directive 2014/107 on the man - datory automatic exchange of account information between EU member state competent authorities. EU DAC 6 Law 4714/2020 transposed into national legislation the provisions of Directive 2017/1852/EU on tax dis - pute resolution mechanisms in the EU. The procedure and timeframe for the dispute resolu - tion mechanism are as follows: • the taxpayer whose taxation is directly affected by the matter in dispute must file a complaint before each of the competent authorities of each of the member states concerned, requesting the resolu - tion thereof;
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