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| 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