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Greece: APA regime just around the corner


Laura Angelou

In the current economic context, the Greek tax authorities are eager to obtain greater tax revenues and transfer pricing is an area Greece can focus on to improve its tax yield. The Greek tax administration deeply scrutinises cases of loss making controlled transactions, saying that the actual prices should have been lower or higher and that more profit should have been offered by the local company.

It is also possible that in cases of loss making intra-group transactions, the Greek tax authority will make a claim that a percentage of the expenses incurred by the controlled transactions should not be considered as tax deductible, while maintaining an analogy between loss and non tax deductible expense amounts.

With the Greek tax administration focusing its attention on transfer pricing and enhancing the relevant audit teams with experienced and well-equipped tax professionals, multinational enterprises (MNEs) operating in Greece are reviewing their intra-group transactions and transfer pricing policies. Though filing transfer pricing documentation helps MNEs in mounting a strong defence and reduces their tax exposure, on its own it may not result in complete elimination of double taxation.

To avoid this tax uncertainty, and as a result of long lasting discussions between tax authorities, MNEs and tax firms with regard to Greek tax reform, the advance pricing arrangement scheme (APA scheme) has been approved by the Greek Parliament and is to be introduced as of January 1 2014.

Although specific guidelines for the application of the APA scheme have not been issued under the existing tax law provisions, the option of obtaining an APA can be characterised as being of a preventive nature.

Under the APA scheme, taxpayers and tax authorities will negotiate in advance the methodology of specific future intra-group transactions, following an application submitted before the General Directorate of Tax Audits and Collection of Public Revenue of the Ministry of Finance.

Specific rules on the application of the APAs are expected before year-end. The scheme should bring tax certainty, reduce litigation expenses and avoid the risk of double taxation, while bringing in extra revenue for the tax administration.

Laura Angelou (

Ernst & Young

Tel: +30 210 2886381


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