GREECE Law and Practice Contributed by: Theodoros Skouzos and Natalia Skoulidou, Iason Skouzos TaxLaw
carried forward indefinitely for future deduction, under the same rules. The rules do not apply to credit institutions, insur - ance/reinsurance companies and pension institutions. Moreover, an exemption is provided for companies that are part of a consolidated group, provided certain conditions are met. Hybrid Mismatch Rules – Greece Greek corporate law allows preference shares with interest-like returns and profit-participation bonds, but tax authorities treat interest paid on such non-voting, non-dividend preference shares as dividends, making them non-deductible. Greece has implemented the EU Parent-Subsidiary Directive anti-hybrid rules and the ATAD framework. As a result, dividends received from EU subsidiaries are exempt from CIT only if the underlying payment was not deductible in the subsidiary’s jurisdiction. This prevents double non-taxation arising from hybrid loan structures treated differently across countries. Greece also applies a reverse hybrid mismatch rule: if non-resident associated entities (holding at least 50% collectively) are in jurisdictions that treat a Greek hybrid entity as taxable, the Greek entity is treated as a Greek tax resident and taxed on income that would otherwise go untaxed in any jurisdiction. Specific Anti-Avoidance Rule Greece has implemented the Specific Anti-Avoid - ance Rule (SAAR) provided by the amended Parent- Subsidiary Directive, according to which the WHT exemption of dividends paid by Greek companies to their EU parent entity and the exemption from CIT on dividends received by Greek companies from their EU subsidiaries is not applied in the context of an artificial arrangement that is not put in place for valid commer - cial reasons that reflect economic reality, but whose main purpose or one of the main purposes is to obtain a tax advantage preventing the object or the purpose of the provision. Exit Taxation Rules Greece’s exit tax rules came into effect on 1 January 2020 and implement the ATAD (Directive 2016/1164/
EU). They apply when assets, tax residence or busi - ness activities move out of Greece, causing the State to lose taxing rights. The goal is to tax the unrealised capital gain inherent in transferred assets. The rules apply to Greek tax-resident legal entities subject to CIT, and to PEs in Greece (individuals are excluded). Exit tax is levied at the 22% CIT rate on the market value minus tax value of affected assets at the time of exit, in the following cases: • the transfer of assets from the Greek head office to a foreign PE where Greece loses taxing rights; • the transfer of assets from a Greek PE to a foreign head office or foreign PE; • the transfer of tax residence abroad, except for assets still linked to a Greek PE; and • the transfer of the business of a Greek PE to another country where Greece no longer has taxing rights. Certain exceptions may apply where specific condi - tions are met. 10. Employment and Labour 10.1 Employment and Labour Framework According to Law 1767/1988, the employees of any business that employs more than 50 people have the right to establish and be elected to works councils for their representation in the enterprise. If there is no trade union organisation within the business, the relevant threshold is 20 instead of 50 employees. The members of works councils enjoy the same pro - tection as the administrators of trade union organisa - tions. Employers, persons acting on their behalf and any third parties are prohibited from proceeding to actions or omissions with a view to impeding the exer - cise of the employees’ rights described above and, more specifically, are prohibited from: • influencing the employees by using threats of dis - missal or other means to obstruct the exercise of rights provided by this Law; • supporting the candidature of employees with financial or other means; and
281 CHAMBERS.COM
Powered by FlippingBook