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Greece: First APA concluded in Greece


Christos Bourkoulas

Transfer pricing (TP) has become a key area for businesses' tax affairs, tax auditors and tax policy-makers. In light of the fiscal situation in Greece, ambitious revenue targets deriving from TP audits have been set and TP related actions for the purpose of fighting tax evasion have been included in the latest memorandum of understanding (MoU) signed between the European Commission and Greece for a three year European Stability Mechanism programme. In this ever-changing environment, multinational businesses have at their disposal a new tool – in the form of the advance pricing agreement (APA) programme – that may manage TP related risks and enable them to mitigate the risk of TP disputes in a proactive manner in cooperation with the tax authorities.

Applications for an APA can be made in relation to cross-border intercompany transactions that take place from January 1 2014 onwards. The APA refers to the criteria to be used in determining intercompany prices for a specified timeframe up to four years; such criteria mainly consist of the TP method, the comparable data and relevant adjustments potentially made and the critical assumptions on future conditions, whereas they can extend to any other particular issue in relation to the intercompany transaction pricing. Any taxpayer interested in an APA may request entering into an informal preliminary consultation with the competent tax office directorate to explore its views on a likely APA content. Such consultation is protected by tax secrecy rules and constitutes a strong indication of the tax authorities' stance on the APA's final content.

EY Greece recently assisted in the successful conclusion of the first unilateral APA by bringing the aforementioned provisions into practice. Experience showed that the APA was concluded in a relatively swift manner and in smooth cooperation with the tax authorities that have welcomed applications for the conclusion of an APA, as stated by the General Secretary of Public Revenues.

Conclusion of an APA may prove to be an excellent opportunity for businesses to obtain a higher degree of certainty in relation to their TP affairs in today's turbulent tax environment. An APA enables companies to pursue their long term business goals unaffected by uncertainty over transfer prices, as well as reducing or eliminating future disputes and decreasing taxpayer exposure to unforeseen tax liabilities thanks to the certainty it provides. The benefits deriving therefrom far outweigh the related costs and duties, while confidentiality is effectively safeguarded. In conclusion, taxpayer businesses may only benefit from this newly introduced procedure that signals the beginning of a new era in establishing trustful and 'win-win' relationships between taxpayers and tax authorities in Greece.

Christos Bourkoulas (, Athens

Tel: +30 210 28 86 441


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