Market overview

Since the financial crisis of 2008 the biggest issue in Greece has been the country's sovereign debt and the subsequent repayments of the bailout package agreed with the EU. Tax reform has been prioritised in an attempt to rid the system of corruption and inefficiency as Greece seeks to get its public finances in order.

"There are reforms taking place in Greece, but in my opinion they are not in the right direction, they increase bureaucracy and increase the amount of obligations on the taxpayers. I do not think they will have the desired effect," said Martha Papasotiriou, tax lawyer at UnityFour in Greece.

In October 2015, the law on penalties for late submission of tax returns and TP documentation was changed in an attempt to rationalise the system. This introduced an increasing penalty for the longer documentation is left inaccurate or late. Repeated failure to file proper TP documentation year on year can lead to significantly higher penalties.

Greece has committed to engage in the sharing of information between relevant tax authorities, but has not yet moved to introduce country-by-country reporting (CbCR). On January 27 2016 the General Secretary of Public Revenues signed the multilateral competent authority agreement for the automatic exchange of CbCR.

A lack of sophistication when it comes to transfer pricing is something that advisers blame for a sometimes frustrating experience when dealing with the tax authorities. "I do not think they have a full and thorough knowledge of the transfer pricing methods – not all the auditors. They don't always have the experience to audit large firms, so this can make it difficult," said Papasotiriou.

The General Secretariat of Public Revenues also this year issued a new ministerial circular on June 6 relating to the application of transfer pricing documentation rules in cases of mergers by absorption relating to the Greek law on business restructuring.

This provision requires that until the date of completion of the restructuring, the absorbed company is liable for TP documentation to verify all transactions for itself and its associated enterprises are at arm's-length.

Tax authorities

Hellenic Republic Ministry of Finance
Karagiorgi Servias 10, GR-105 62 Athens
Tel: +30 210 337 5000
Fax: +30 210 333 2608

Tax rates at a glance

(As of April 2016)

Corporate income tax 29%
Capital gains tax 29%
Branch tax 29%
Withholding tax
Dividends 10% (a)
Bank interest 15% (b)(c)
Interest on treasury bills and corporate bonds 15% (b)(c)
Repos and reverse repos 15% (b)(c)
Other interest
Paid to Greek legal entities 15%
Paid to Foreign legal entities 15% (c)(d)
Royalties 20% (c)(d)
Technical service fees, management service fees, consulting service fees and fees for similar services 20% (f)
Net operating losses (years)
Carryback 0
Carryforward 5

  1. The 10% withholding tax rate applies to dividends and interim dividends distributed by a Greek corporation (anonymos eteria, or AE; (in certain countries, a corporation is referred to as a société anonyme, or SA) and profits distributed by a Greek limited liability company (eteria periorismenis efthinis, or EPE). This 10% withholding tax is subject to rates applicable under double tax treaties or under the European Union (EU) Parent-Subsidiary Directive (amended by Directive 2011/96/EC).
  2. This 15% withholding tax is subject to rates applicable under double tax treaties or under the EU Interest-Royalties Directive.
  3. This is a final tax if the beneficiary is a legal person (for example, a company) or legal entity that satisfies both of the following conditions:
    • It does not have its tax residency in Greece.
    • It does not maintain a permanent establishment for corporate income tax purposes in Greece.
  4. This 20% withholding tax is subject to rates applicable under double tax treaties or under the EU Interest-Royalties Directive. No tax is withheld on payments of royalties made to legal persons or legal entities that have their tax residence in Greece or that have a Greek permanent establishment in Greece.
  5. If the 20% withholding tax does not exhaust the final Greek corporate income tax liability of the beneficiary, it is credited against the beneficiary's final Greek corporate income tax liability.

Source: EY 2016 Worldwide Corporate Tax Guide