GREECE Law and Practice Contributed by: Theodoros Skouzos and Natalia Skoulidou, Iason Skouzos TaxLaw
Media Transactions in informative media (news TV, radio, press) face special ownership caps and concentration rules under Law 3592/2007, enforced alongside the Competition Law and overseen also by the National Council for Radio and Television (ESR). Transport, Infrastructure, Defence and “Strategic Asset” Sectors Depending on the asset, additional approvals may also be required in the following areas: • aviation – approvals relating to Air Operator Certifi - cate holders and airport concessions; • ports and shipping – the Ministry of Shipping and sometimes concession-specific change-of-control consents; and • defence/dual use – MoD and export-control related clearances. These often interact with the new FDI regime, given the overlap in “highly sensitive” sectors. All legal entities that are resident in Greece are taxed on their worldwide income, while non-resident legal entities are taxed only on Greek-source income. Per - manent establishments (PEs) of foreign legal entities in Greece are taxed on income attributable to the Greek PE. In principle, the Greek definition of a PE follows the OECD MTC and its Commentary. A legal entity is tax resident in Greece if it is incorpo - rated or established under Greek law, if its registered seat in Greece, or if the place of effective management (POEM) is in Greece at any time during the tax year. The POEM is determined based on actual facts, taking into consideration factors such as: • the place of exercise of day-to-day management and strategic decision-making; • annual general shareholder meetings; • book-keeping; • board meetings; 9. Tax 9.1 Taxation of Business Activities Corporate Income Tax (CIT)
• the residence of board members, etc The residence of shareholders/partners may also be taken into account. From 2021 onwards, all resident legal entities are taxed at a CIT rate of 22%, regardless of their legal form (with the exception of credit institutions subject to specific rules on deferred taxation, which are sub - ject to a CIT rate of 29%). All income generated by legal entities, including capi - tal gains, is treated as business income and is sub - ject to CIT, after the deduction of deductible business expenses, depreciation and bad debt provisions. Business expenses are deductible if they: • relate to real transactions at market value; • are recorded in the books and are supported by relevant tax records; and • are not included in the list of explicitly non-deduct - ible expenses. Non-deductible expenses include interest expenses on loans granted by third parties (excluding bank loans, inter-bank loans, inter-company loans and bond loans issued by SAs), to the extent they exceed the interest rate of loans on open deposit/withdrawal accounts granted to non-financial enterprises, as pub - lished in the Statistical Bulletin of the Central Bank of Greece for the period closest to the date of the loan. Moreover, thin cap rules allow the deductibility of net interest, exceeding EUR3 million, up to 30% of EBITDA (credit institutions, insurance/reinsurance companies and pension institutions are exempt). Special deductibility restrictions apply for transactions with non-co-operative states and states with prefer - ential tax regimes. Tax losses are carried forward for five years, while carry-back is not allowed. Group taxation is not applicable in Greece.
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