GREECE Law and Practice Contributed by: John C. Dryllerakis, John Papadakis and Nikos Kalantzis, Dryllerakis Law Firm
5.2 Anti-Avoidance Mechanisms Greek tax legislation has incorporated a number of anti-tax avoidance rules, both general (general anti- abuse rule – GAAR) and targeted ones (targeted anti- abuse rule – TAAR). These are as follows. GAAR Provided Under Article 39 of Law 5104/2024 GAAR was initially based on the European Commis - sion’s Recommendation on Aggressive Tax Planning (EU GAAR), published on 6 December 2012 (C(2012) 8806 final). By virtue of Article 13 of Law 4607/2019, GAAR was amended to transpose Article 6 of the Anti- Tax Avoidance Directive (EU) 2016/1164 (ATAD). GAAR provides that tax authorities should ignore any arrangement or series of arrangements that have been put into place for the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object or the purpose of the applicable tax law and are not genuine, having regard to all relevant facts and circumstances. TAAR for Tax Losses Forfeiture Provided Under Article 27 of Law 4172/2013 TAAR refers to the fact that it is not possible to carry forward losses in the event of a change of more than 33% of the direct or indirect holding or the voting rights in a legal person or entity, provided that there is also a change of activity of the legal person or entity that exceeded 50% of its turnover in relation to the immediately preceding tax year from the change of shareholding structure or voting rights. TAAR for Corporate Restructurings Provided Under Article 56 of Law 5162/2024 TAAR on corporate restructurings is aligned with the provisions of the 2009/133/EU Directive and applies to all restructurings (mergers, full or partial demergers, spin-offs, share exchanges or transfers of the regis - tered seat) effected under Articles 47 to 55 of Law 5162/2024. By virtue of TAAR, to the extent that tax avoidance or tax evasion is identified as the main or one of the main objectives of the companies under restructuring, all benefits granted in accordance with the above-mentioned articles are fully or partially dis - allowed. The fact that a transaction is not performed for valid economic reasons, such as restructuring or rationalisation of activities, may constitute evidence
that the main or one of the principal objectives of the transaction is tax avoidance or tax evasion. Other Rules There are other anti-avoidance rules included in the Greek tax legislation, such as thin capitalisation rules (see under Section IX.vi), as well as CFC rules, which, in general, provide that the undistributed passive income of a foreign legal person or entity satisfying certain conditions shall be attributed to and taxed by the Greek resident controlling shareholder. 5.3 Blacklists and Non-Cooperative Jurisdictions Greece maintains two distinct lists of jurisdictions for tax purposes. The first list includes non-cooperative jurisdictions, comprising states or territories that fail to meet international standards on tax transpar - ency, exchange of information, or compliance with anti-BEPS measures. The second list covers juris - dictions with preferential tax regimes, namely those with corporate tax rates significantly lower than the Greek statutory rate or that provide other substan - tially beneficial tax treatment. Both lists are published and updated annually by the Greek tax authorities in accordance with domestic law and EU coordination frameworks. Under Article 23 of the Greek Income Tax Code (Law 4172/2013), all expenses paid to a tax resident in a non-cooperative jurisdiction or subject to a preferen - tial tax regime are generally non-deductible. Deduct - ibility may only be allowed if the taxpayer can dem - onstrate that such expenses relate to genuine and ordinary transactions and that they do not result in the transfer of profits, income, or capital with the purpose of tax avoidance or evasion. This limitation ensures that transactions with high-risk or low-tax jurisdictions cannot be used as a conduit for artificially reducing the Greek tax base. However, this provision does not preclude the deduc - tion of expenses paid to a resident in a European Union (EU) or European Economic Area (EEA) Member State, provided that there exists a legal framework for the exchange of tax information between Greece and that Member State. This distinction reflects Greece’s alignment with EU transparency standards while safe -
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