GREECE Law and Practice Contributed by: Theodoros Skouzos and Natalia Skoulidou, Iason Skouzos TaxLaw
Special Cases Stock options are taxed at 15% capital gains if the shares are sold 24 months from being granted. Start-up shares (non-listed) are taxed at 5% if they are sold after 36 months. Free shares under award plans are taxed at 15% capi - tal gains, regardless of the holding period. 9.5 Anti-Evasion Regimes Intra-Group Transfer Pricing Rules Intra-group transactions must follow the arm’s length principle, based on OECD transfer pricing Guidelines. Related entities are obliged to prepare a Transfer Pric - ing Documentation File and submit a Summary Infor - mation Sheet for intra-group transactions. An exemption applies if: • the total value of intra-group transactions is below EUR100,000 annually, where the total annual turnover of the liable party does not exceed EUR5 million; or • the total value of intra-group transactions is below EUR200,000 annually, where the total annual turno - ver of the liable party exceeds EUR5 million. Advance Pricing Agreements (APAs) are regulated and can be unilateral, bilateral or multilateral. Multinational groups whose annual, consolidated group revenues exceed EUR750 million have Country by Country (CbC) reporting and/or notification obliga - Under the General Anti-Avoidance Rule (GAAR), which adopts the relevant ATAD provisions, tax authorities may ignore any arrangement or series of arrange - ments which, having been put into place for the main purpose or one of the main purposes of obtaining a tax advantage that is contrary to the object or the purpose of the applicable tax law, are not genuine, taking into account all facts and circumstances. An arrangement or a series of arrangements shall be con - sidered as non-genuine if it is not put in place for valid commercial reasons that reflect economic reality. tions, within strict deadlines. General Anti-Avoidance Rule
Controlled Foreign Company (CFC) Rules – Greece Greece’s CFC regime is a Targeted Anti-Avoidance Rule (TAAR) aimed at preventing Greek taxpayers (individuals or companies) from shifting income to low-taxed foreign subsidiaries. A Greek taxpayer must include the undistributed income of a foreign entity (the CFC) in its own taxable income when all of the following apply: • the taxpayer (alone or with associated entities) holds over 50% of the CFC’s voting rights, capital or profits; • the CFC’s actual foreign tax is less than half of what would be due under Greek tax rules; and • more than 30% of the CFC’s pre-tax income con - sists of passive or mobile income, including: (a) interest and other financial asset income; (b) royalties and IP income; (c) dividends and capital gains; (d) financial leasing income; (e) insurance, banking and other financial activi - ties; or (f) low-value-added intra-group invoicing income. When these conditions are met, the qualifying undis - tributed income is taxed in Greece as business income, with foreign tax credited up to the Greek tax amount. If profits are later distributed, previously taxed amounts are excluded to avoid double taxation. Exceptions CFCs in the EU/EEA are excluded if they conduct sub - stantial economic activity supported by staff, assets and premises. The rules also do not apply to shipping companies operating under Law 27/1975 or Law 2687/1953, nor to entities funded by shipping-related capital or ship - ping funds owned by associated individuals. Thin Capitalisation Rules Thin capitalisation rules (ie, interest deductibility limi - tation rules) disallow the deduction of interest to the extent that the surplus of interest expenses over inter - est income exceeds 30% of EBITDA. By derogation, net interest expenses of up to EUR3 million are fully deductible. Any disallowed interest expenses can be
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