GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
agreement. Crucially, bond loans issued under the Company Law remain exempt from DTD. DTD applies if at least one party is a Greek tax resident or has a permanent establishment in Greece, regardless of where the agreement is signed. A special annual contribution of 0.6% is also imposed on the average outstanding monthly balance of loans granted by credit and some financial institu - tions. Financing structured as a bond loan is typically exempt from this levy. The costs for establishing and perfecting security in Greece depend on whether the financing is structured as a bond loan or a standard bilateral loan. For credit lenders using bond loans, perfection costs are signifi - cantly incentivised: the registration of pledges (at the Electronic Pledge Registry) or mortgages (at the land registry/cadastre) is capped at a flat fee of EUR100 per security interest. In contrast, standard loans are subject to proportional registration fees, typically ranging from 0.75% to 0.8% of the secured amount. Beyond registration fees, lenders must account for notary and legal contributions. Notary fees for drafting security deeds are generally around 1% of the value (often subject to negotiation for high-value transac - tions), while legal costs may include mandatory con - tributions to the Lawyers’ Fund and Bar Associations. Other tax considerations include the following. • VAT: financial services, including granting credit, are generally VAT-exempt. However, ancillary services (eg, certain management fees) may be subject to the standard 24% VAT. • Capital gains: gains from the transfer of securities (such as bonds) are typically not taxed in Greece for non-resident lenders unless they maintain a permanent establishment. 4.3 Tax Concerns for Foreign Lenders The most immediate concern for a foreign lender is the 15% interest WHT applied to interest payments from Greek borrowers. Additionally, standard bilateral loans are subject to a 2.4% DTD. Lenders also face a per - manent establishment risk; if credit decisions or loan management are conducted through a fixed base or
dependent agent in Greece, the lender’s profits could be subject to the standard 22% corporate income tax. To optimise these costs, lenders and borrowers typi - cally employ the following strategies. • Structuring as a bond loan: bond loans are fully exempt from the 2.4% DTD. In addition, if the bonds are listed, non-resident bondholders are exempt from WHT. • Double taxation treaties (DTTs): foreign lenders can mitigate the 15% WHT by utilising DTTs between Greece and their home jurisdiction (eg, Luxem - bourg, Ireland or the UK), which often reduce the rate to 10%, 5% or 0%. • Remote governance: lenders should ensure that all key investment committee decisions and loan administration are performed outside Greece, maintaining the lender’s status as a non-resident for tax purposes. In the Greek credit market, typical collateral packages combine in rem securities over real estate (mortgages or prenotations), pledges over movable assets and rights (shares, bonds, receivables) and in personam guarantees. Each asset type follows distinct rules. Real estate mortgages require a notarial deed, whereas, following Greek Law 5095/2024, the establishment of a consen - sual prenotation of a mortgage is primarily effected via a lawyer’s deed. In both cases, perfection of the security interest is achieved through registration in the public books of the competent cadastre/land registry. Following the recent Greek Law 5123/2024, pledges are now established through a private or electronic agreement (signed with a qualified e-signature or via gov.gr) between the parties, which is registered in the new Electronic Pledge Registry by either the pledgor or the pledgee. This framework applies to a wide range of assets, including claims, corporate shares and participations, as well as movable property that remains in the debtor’s possession. 5. Guarantees and Security 5.1 Assets and Forms of Security
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