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Greece: Challenges in preparing Greek transfer pricing documentation


Christos Kourouniotis

Transfer pricing provisions have existed in the Greek tax legislation since as early as 1958, but it was not until 2008 that the burden of proof was shifted to the taxpayer with the introduction of transfer pricing (TP) documentation requirements. Thus, after a 50-year period during which the taxpayer was not required (unless challenged by the tax auditors) to demonstrate the arm's-length nature of its intragroup transactions, we have experienced a six-year period during which the Greek taxpayer has been required to prepare documentation on an annual basis and under three different sets of documentation, whereas quite recently a fourth set of documentation requirements was introduced.

We have an average of two years for which each set of documentation rules applied (2008-2009, 2010-2011, 2012-2013), and each set of rules provided a different definition of affiliate entities, a different scope of application as regards types of transactions, different documentation thresholds and different penalties. Unfortunately, all shared one common attribute: the documentation file's content was not sufficiently defined.

Last April, the Ministry of Finance issued the most detailed guidance to date with regard to the Greek TP documentation requirements that currently apply. This development is to be welcomed; not only is it a necessary step under the principle of good management, but it is also a source of optimism signaling that the new set of documentation requirements is here to stay.

Despite the real improvements noted, there are a few issues yet to be clarified or for which further guidance is required. These issues include:

  • the definition of affiliates, especially the definition of decisive influence and the cases where family relations between individuals may result to entities being affiliated;

  • the possibility to use any other methods considered as appropriate/reasonable, apart from the five OECD authorised methods;

  • the hierarchy of methods, that is, the elimination of the priority of cost-plus and resale minus methods over TNMM and profit split in accordance with the 2010 revision of the OECD Guidelines; and

  • the use of the interquartile range on an ad hoc basis versus using the interquartile range in all cases that involve a range of comparable data.

Finally, in my view, what is still missing from the current transfer pricing provisions, is the possibility of having penalty protection where the taxpayer is able to demonstrate that a transaction has not affected the taxes/duties due (considering both counterparties), hence it has not resulted in reduction of taxable base.

In an environment where even alleged instances of tax evasion or tax avoidance attract more adverse implications than just monetary tax liability (for example, bad publicity risk), the new Greek TP documentation requirements, as well as the practical issues that may arise based on the ambiguous areas described above, call for a careful preparation well in advance of the statutory deadline for completing the annual TP documentation requirements (this is four months following the fiscal year's end).

Christos Kourouniotis (


Tel: +30 210 28 86 378


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