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New guidance on Greek TP documentation for mergers by absorption


The General Secretariat of Public Revenues in Greece issued a new Ministerial Circular on June 6, which refers to the application of transfer pricing documentation rules in cases of mergers by absorption, realised according to the provisions of Law 2166/1993 concerning business restructurings.

Liable company

More specifically, the new ministerial circular clarifies that, in a case of a merger of two companies by absorption, pursuant to the favourable provisions of L. 2166/1993 on business restructurings, the intragroup transactions that take place between the absorbed company and its associated enterprises after the compilation date of  the transformation balance sheet and until the completion date of  the restructuring (i.e. the date that the respective decision is registered in the General Electronic Commercial Registry), should be properly documented in terms of compliance with the arm’s-length principle by the absorbed company, which is, in principle, subject to the TP documentation requirements enacted by article 21 of L. 4174/2013 or the Greek Code of Tax Procedures(GCTP).

In other words, it is the absorbed company which is liable to proceed to the compilation of a respective TP file. This should include the documentation of the abovementioned intragroup transactions that have taken place following the issuance of the transformation balance sheet and up until the completion of the relevant merger, as well as the electronic submission of a respective summary information table to the General Secretariat of Informational Systems at the Ministry of Finance. It goes without saying that such a requirement exists in case the specific conditions of art. 21 of the GCTP are fulfilled, namely when the intercompany transactions in total exceed the annual thresholds of €100,000 ($112,500), for companies with turnover less than €5,000,000, and €200,000,for companies with turnover exceeding €5,000,000.

This is also in line with the interpretative Ministerial Circular POL. 1080/5.4.1994. According to this, the merged company continues to exist, to conduct transactions and to issue the relevant tax records following the compilation of the transformation balance sheet and until the completion of the merger and the incorporation of the new company (post-merger).  However, all these transactions are regarded as having been conducted by the new company and, therefore, all these actions will be transferred in the new company’s accounting books with an aggregate accounting entry, following its establishment. 

Tested transactions

Furthermore, it is also clarified that such a documentation requirement covers all intragroup transactions conducted between the absorbed company and its associated enterprises. The only exclusions are the transactions that have taken place between the absorbed company and the absorbing company during the specific time period mentioned above, given that for such transactions a reversal entry in the accounting books of the absorbing company can be effected , following the merger by absorption, which renders any documentation of the said transactions unnecessary.

Further to the above, the recently issued ministerial circular stipulates that, in a case of intragroup transactions that have been conducted by the absorbed company until the date of issuance of the transformation balance sheet, the TP documentation file is prepared and the respective summary information table is electronically submitted within four  months after the date of compilation of the transportation balance sheet, which also constitutes the respective fiscal year end, as prescribed by the Ministerial Circular POL. 1231/21.10.2015, since no liquidation process applies, provided that the conditions of art. 21 of the GCTP, as referred to above, are cumulatively met.       

Eftichia Piligou

Eftichia Piligou , Tax principal


Vasiliki Athanasaki

Vasiliki Athanasaki, Tax supervisor

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