GREECE Law and Practice Contributed by: John C. Dryllerakis, John Papadakis and Nikos Kalantzis, Dryllerakis Law Firm
tation brought aspects of the OECD/G20 Pillar Two global minimum tax framework into Greek legislation, in line with the EU’s coordinated approach to ensure a minimum effective level of taxation for large multi - national enterprise groups and large domestic groups. Law 5100/2024 introduces two interrelated mecha - nisms, the Income Inclusion Rule (IIR) and the Under - taxed Profits Rule (UTPR), collectively referred to as the GloBE rules. Under these rules, an additional amount of tax, known as a top-up tax, is collected whenever the effective tax rate of an MNE or large domestic group in a jurisdiction falls below 15%. In addition, the Law establishes a framework for a Domestic Minimum Top-up Tax (DMTT), designed to qualify under the Pillar Two rules. The legislation also provides for several safe harbour provisions, includ - ing: • the Qualified DMTT (QDMTT) safe harbour; • transitional Country-by-Country Reporting (CbCR) safe harbours; and • the UTPR transitional safe harbour. The entry into force of the CbCR and UTPR safe har - bours is contingent upon the issuance of a Ministerial Decision, which will determine the effective dates. The Law explicitly states that these safe harbours are to be interpreted in accordance with the OECD Model Rules. 4.4 Specific Features or Deviations of Pillar Two The Greek legislation (Law 5100/2024) closely follows the OECD/G20 Pillar Two framework; however, there are some notable deviations and limitations compared with the OECD model rules. • First, the Law implements only the elections pro - vided under the EU Directive, without incorporating the optional elections or clarifications contained in the OECD Administrative Guidance. As a result, certain features available under the OECD frame - work (such as additional flexibility in applying the top-up tax or specific treatments under the IIR/ UTPR) are not currently reflected in Greek domes - tic law.
• Second, while the Law introduces the Qualified Domestic Minimum Top-up Tax (QDMTT) and safe harbours (including the CbCR and UTPR transi - tional safe harbours), the entry into force of these safe harbours depends on Ministerial Decisions, leaving some practical aspects of implementation uncertain. • Third, although the safe harbours are to be inter - preted in accordance with the OECD Model Rules, it is not explicitly stated whether the Greek Tax Administration is bound by the OECD Administra - tive Guidance for the remaining Pillar Two provi - sions. This creates some discretion in interpretation and potential divergence from OECD guidance in practice. • Finally, by following the EU Directive rather than the OECD text directly, the Greek rules align with EU coordination measures, which may limit certain optional OECD provisions, particularly in relation to transitional elections and adjustments for multi - national enterprises operating across multiple EU jurisdictions. 4.5 Digital Services Tax Greece does not currently impose a national Digital Services Tax (DST). Nonetheless, the country has been actively engaged in discussions within the Euro - pean Union on adopting a common DST, which would target revenues from digital activities, including online advertising and digital intermediation services. In parallel, Greece participates in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shift - ing (BEPS). The BEPS 2.0 initiative seeks to address the tax challenges arising from the digitalisation of the economy, including the reallocation of taxing rights to market jurisdictions and the establishment of a global minimum tax. The implementation of these multilateral measures is expected to reduce the need for unilateral digital services taxes. However, the rollout of BEPS 2.0, particularly Pillar One, has been slower than ini - tially anticipated, creating some uncertainty regarding the timing and scope of a coordinated international solution.
178 CHAMBERS.COM
Powered by FlippingBook