Copying and distributing are prohibited without permission of the publisher

Greece: Administrative guidelines published on tax benefits of cross-border restructurings

30 May 2017

Email a friend
  • Please enter a maximum of 5 recipients. Use ; to separate more than one email address.


Diana Tsourapa

The Greek Independent Authority for Public Revenue (IAPR) has published Circular POL. 1057/2017 (the Circular), which sheds some light and provides the much anticipated administrative guidelines on the implementation of the Greek Income Tax Code (GITC) tax beneficial provisions, applicable to mergers, divisions, partial divisions, spin-offs and share-for-share exchanges (collectively the restructuring provisions). The provisions apply both in cases of Greek and EU cross-border restructurings.

The provisions have been in force since January 1 2014, and have been applied to restructurings realised on the basis of corporate resolutions taken as of that date onwards. In this context, the lack of clear guidelines so far has created a misty tax regime that the issued Circular aims to clarify.

As a preliminary remark, the IAPR explicitly stipulates that the tax provisions under consideration do not affect the relevant corporate framework as defined by the applicable corporate legislation. Therefore, the restructuring provisions should be considered as regulating tax issues, without setting deviations nor additional requirements as regards the relevant corporate procedures, with the exception of the partial division that is an option provided only by the provisions of the GITC.

Furthermore, the IAPR has highlighted that application of the GITC restructuring provisions is optional for the taxpayer, since a business may opt to be subject to the general tax regime. In any case, the exercise of this option should be evidenced by any appropriate means, such as the respective corporate resolutions.

In addition, as regards the interpretation of the specific rules set by the provisions at hand, i.e. transfer of assets in exchange for securities – e.g. spin-offs and carve-outs – (Article 52 of the GITC), exchange of shares (Article 53 of the GITC) as well as mergers, divisions and partial divisions (Article 54 of the GITC), the Circular provided important clarifications on the requirements for their application as well as the tax benefits stemming therefrom.

In view of the above, the Circular has to a great extent contributed to the interpretation of the GITC restructuring provisions by setting the basic directions that had been missing for more than three years since the enactment of the latest GITC.

However, one should take into consideration the relevant targeted anti-avoidance provision (Article 56 of the GITC) as per which the tax benefits could be overturned in cases where the restructuring is effected for the main purpose (or where one of the main purposes is) to avoid or evade tax. The aforementioned anti-avoidance rule, combined with the fact that the Greek tax authorities have reserved the right to set additional requirements in order to avoid abuse of the restructuring provisions, could lead to the conclusion that there are still certain grey aspects of the Greek tax framework. To this end, the Greek tax administration could further elaborate these issues, especially in lack of administrative and judicial precedents, in order to create a safe, predictable and investor-friendly tax environment.

Diana Tsourapa (diana.tsourapa@gr.ey.com), Maroussi
EY
Tel: +30 210 2886 000
Website: www.ey.com






International Tax Review Profile

RT @AuroChardon: Let's honour the #memory of a brave #journalist and woman ➡️ vigil tomorrow, 18 Oct, 6pm, in front of Residence Palace #Da…

Oct 18 2017 04:42 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Big Soda scores victory as Chicago-area tax repealed - could this be the beginning of the end of the sugar tax trend?https://t.co/PNuafWHy9K

Oct 12 2017 04:03 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Ebay and Netflix pay total UK tax of less than £1.9m - How long until HMRC investigate their TP practices? https://t.co/VPPsT3aGMZ via @FT

Oct 12 2017 03:59 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Panama Papers: German authorities carry out first raids in connection with tax leaks https://t.co/LgalVGGw0x via @dwnews

Oct 12 2017 03:49 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @ScoopOnTaxes: @Skynet This will not end well for humanity. https://t.co/jsxVwDoDc5

Oct 11 2017 12:02 ·  reply ·  retweet ·  favourite
International Correspondents