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

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

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

intl-updates-small.jpg
tsourapa.jpg

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

more across site & shared bottom lb ros

More from across our site

It should be easy for advisers to be transparent about costs, Brown Rudnick partner Matthew Sharp said in response to exclusive ITR in-house data
The sprawling legislation phases out Joe Biden-era green tax incentives for businesses; in other news, the UK will reportedly maintain its DST despite US pressure
New French legislation should create a more consistent legal environment for taxing gains from management packages, say Bruno Knadjian and Sylvain Piémont of Herbert Smith Freehills Kramer
The South Africa vs SC ruling may embolden the tax authority to take a more aggressive approach to TP assessments, an adviser tells ITR
Indirect tax professionals now rate compliance as a bigger obstacle than technology and automation; in other news, Italy approved a VAT cut on art sales
AI-powered tax agents are likely to be the next big development in tax technology, says Russell Gammon of Tax Systems
FTI Consulting’s EMEA head of employment tax and reward tells ITR about celebrating diversity in the profession, his love of musicals, and what makes tax cool
Canadian Prime Minister Mark Carney and US President Donald Trump have agreed that the countries will look to conclude a deal by July 21, 2025
The firm’s lack of transparency regarding its tax leaks scandal should see the ban extended beyond June 30, senators Deborah O’Neill and Barbara Pocock tell ITR
Despite posing significant administrative hurdles, digital services taxes remain ‘the best way forward’ for emerging economies, says Neil Kelley, COO of Ascoria
Gift this article