Hybrid Mismatches

Greece adopted hybrid mismatch rules in line with the EU Anti-Tax Avoidance Directive, as amended (ATAD 1 and 2) with effect for tax years commencing on or after 1 January 2020. The objective of the rules is to prevent double deduction and deduction without inclusion as a result of mismatches arising between associated enterprises where there is a holding, directly or indirectly, of 50% or more in the voting rights, capital, or rights to profit.

If a mismatch arises, it is neutralized by:

In a double deduction mismatch, the deduction is denied at the investor's level, and where the deduction is not denied at the investor's level, the deduction will be denied at the payer's level; and
In a deduction without inclusion mismatch, the deduction is denied in the payer's jurisdiction, and where the deduction is not denied in the payer's jurisdiction, the amount of the payment that would otherwise give rise to a mismatch will be included in income at the payee's jurisdiction (relief provided in the event of dual inclusion income in current or subsequent years).

Reverse Hybrid Mismatch

Effective 1 January 2022, Greece introduced the reverse hybrid mismatch rules in line with the EU Anti-Tax Avoidance Directive (ATAD2). The law provides that if one or more associated enterprises being a non-resident maintains a total direct or indirect interest of 50% or more of the voting rights, capital interests, or rights to a share of profit in a hybrid entity incorporated or established in Greece, and such associated enterprises are located in a jurisdiction or jurisdictions which treat the said hybrid entity as taxable in Greece, then the hybrid entity will be considered as a tax resident of Greece and will be taxed on its income to the extent that such income is not otherwise taxed under any other provisions of the domestic law or the legislation of any other jurisdiction.

However, the reverse hybrid mismatch rules do not apply to a collective investment undertaking. For this purpose, a collective investment undertaking is defined as an investment organization or a company with broad participation of shareholders that holds a diversified portfolio of transferable securities, and which is governed by an investor protection regulation in the country where the undertaking or the company is established.

Exchange of Cross-Border Tax Rulings

In line with BEPS Action 5 and the EU directive on mutual administrative assistance, Greece has adopted various measures in its domestic laws to enable the exchange of information on cross-border tax rulings and advance pricing agreements (APAs) beginning from 1 January 2017.

Financial Account Information Reporting and Exchange

Greece has adopted measures to implement the automatic exchange of financial account information with the EU Member States pursuant to Council Directive 2014/107/EU of 9 December 2014, which synchronized EU rules with the global standard for the exchange of information developed by the OECD under the Common Reporting Standard (CRS). Greece proceeded on 30 September 2017 with the exchange of information on accounts held by financial institutions. Further, Greece has also concluded an Intergovernmental Agreement (IGA) with the US for the implementation of the US Financial Account Tax Compliance Act (FATCA).

Mandatory Reporting of Cross-Border Tax Arrangements (DAC6/ MDR)

Greece has approved the law implementing the EU Council Directive (DAC6), which requires the reporting of cross-border tax planning arrangements and the exchange of information with the other EU Member States. The reporting requirement primarily applies to intermediaries that design, market, organize, or manage the implementation of a reportable arrangement. However, the reporting requirements may also be shifted to the taxpayers in certain cases, including where an intermediary is subject to confidentiality obligations or where a taxpayer has designed an arrangement without external intermediaries.

The first reporting of information on reportable cross-border arrangements, implemented between 25 June 2018 and 31 January 2021, took place on 28 February 2021. The first automatic exchange of information between the tax authorities of the Member States took place on 30 April 2021. Reportable transactions must be disclosed by intermediaries and relevant taxpayers within 30 days from the date the arrangement was first put in place, for transactions designed or implemented as of 1 February 2021. Further, the law also requires periodic reporting on marketable arrangements.

Failing to submit information on reportable cross-border arrangements will result in a penalty of EUR 5,000 if the taxpayer applies a simple bookkeeping system or EUR 10,000 in the case of double-entry bookkeeping. The submission of incomplete or inaccurate information will result in penalties of EUR 2,500 or EUR 5,000, respectively. In the case of late filing, a penalty of EUR 250 or EUR 500 per month, respectively, applies for up to three months, after which the penalty is set at EUR 2,500 or EUR 5,000. The penalties apply for each reportable arrangement.

Mandatory Reporting of Information by Digital Platform Operators (DAC7)

Effective 7 September 2023, Greece implemented the EU Council Directive (DAC7) which requires digital platform operators, located both inside and outside the EU, to report information about income earned by sellers of goods and services through their digital platforms. Digital collaborative platforms generally consist of any software, including a website or a part thereof, and applications, including mobile applications, accessible by users and allowing sellers to be connected to other users for the purpose of carrying out a relevant activity, directly or indirectly, to such users.

The reporting obligations apply to reporting platform operators. A reporting platform operator is an entity that provides a digital platform for facilitating a connection between buyers and sellers for carrying out a relevant activity and that meets any one of the following conditions:

Is a resident for tax purposes in Greece; or
Has a registered office, place of management, or permanent establishment in Greece; and
Is not a qualified platform operator outside the EU.

Following sellers are exempted from obligation of reporting:

Governmental entities;
Listed companies, as well as companies that are controlled by listed companies;
Entities that perform more than 2,000 activities related to the rental of real estate through the platform during the reportable period; and
Sellers that perform less than 30 activities related to the sale of goods through the platform and for which the total amount of consideration does not exceed EUR 2,000 during the reportable period.

A platform operator is considered a qualified platform operator outside the EU if:

All of its activities qualify as relevant activities; and
It is a tax resident, registered under the laws, or has its headquarters (including actual management) in a qualified jurisdiction outside the EU.

A relevant activity is an activity carried out for consideration including the following:

Renting and leasing of immovable property, including residential and commercial property and parking lots;
Provision of personal services;
Sale of goods; and
Rental of any mode of transport.

The report is required to be submitted annually by 31 January of the following calendar year. The first report is due by 31 January 2024 for the period beginning 1 January 2023. The information reported is automatically exchanged with the tax authorities of the concerned EU Member State for enforcing tax rules and ensuring tax compliance. The first exchange of information is expected to take place by the end of February 2024.

Failure to comply with the registration or reporting requirements may attract a levy of penalty.

EU Joint Audits

Joint audits in the form of administrative enquiries can be conducted jointly by the Competent Authorities of two or more EU Member States. One or more other Member States can request a joint audit, and the Greek tax authority must inform the applicant of its participation within 60 days of the receipt of the request. During the joint inspection, the official of the requesting authority, together with the official of the Greek tax authority, will have similar rights as the Greek tax authority to enter the premises of the taxpayer, access the documents of the taxpayer, and require the taxpayer to make a statement. The Greek tax authority and the requesting authority must agree on the results of the audit and issue a joint audit report in writing. A copy of the final audit report is sent to the taxpayer within 60 days of its issuance.

Exit Tax Rules

Effective 1 January 2020, Greece implemented the exit tax measures in line with the EU Anti-Tax Avoidance Directive, as amended (ATAD 1 and 2). The rules provide that the payment of exit tax may be deferred and paid in instalments over a period of five years where the assets, tax residence, or activities of a taxpayer are transferred to other EU/EEA Member States.

A letter of guarantee is to be provided for the deferral of exit tax when there is a proven and actual risk of non-recovery of the tax, i.e., when the ratio of current assets to total liabilities of the legal entity is lower than 1, based on the official financial statements of the last tax year. The guarantee must be equal to two instalments and should expire after 3 months and 2 business days of the payment date for the final instalment. However, if the amount is lower or the term of the letter is for a shorter duration, the exit tax must be paid in a lump sum.

Exit tax rules do not apply to assets transferred in relation to the financing of securities, assets posted as collateral, or where the asset transfer takes place in order to meet prudential capital requirements or for the purpose of liquidity management, provided that the assets are returned to Greece within a period of 12 months. However, a letter of guarantee is required in relation to such exemption, where the guarantee must be equal to the total amount of exit tax due and must expire 6 business days after the 12-month period.

Low or No Tax Jurisdictions and Tax Regimes

The domestic tax laws include a specific anti-avoidance rule whereby payments made to entities located in non-cooperative jurisdictions or preferential tax regimes are not tax-deductible.

Non-Cooperative Jurisdictions

Non-cooperative jurisdictions are defined as those that are not EU Member State and which do not have an in-force agreement with Greece on administrative assistance in tax matters. Effective 1 January 2018, the definition of a non-cooperative jurisdiction is amended in order to align with international developments.

A jurisdiction is considered non-cooperative if the jurisdiction:

Is not an EU Member State;
Has not received at least a largely-compliant rating from the OECD on transparency and exchange of information standards;
Has not concluded an agreement with Greece providing for administrative assistance or has not signed the Mutual Assistance Convention; and
Has not committed to the exchange of financial account information under the OECD Common Reporting Standard by the end of 2018.

Greece on 25 October 2023 gazetted the list of non-cooperative jurisdictions for the tax year 2022. The list consists of the following:

Algeria (from 1 January 2021)	Angola (from 1 January 2022)	Anguilla	Antigua and Barbuda	Barbados (until 31 December 2021)
Belarus (from 1 January 2021)	Benin	Botswana	British Virgin Islands (from 1 January 2022)	Burkina Faso
Cambodia	Congo (Rep. of) (from 1 January 2021)	Chad	Djibouti	Dominica
Eswatini (until 30 June 2021)	Gabon	Ghana	Guatemala	Guinea
Guyana	Haiti	Honduras	Ivory Coast	Jordan (until 30 November 2021)
Kazakhstan	Liberia	Lesotho	Oman (until 31 December 2020)	Mali
Madagascar	Maldives (until 31 December 2021)	Mauritania (until 31 July 2022)	Namibia (until 31 March 2021)	Nicaragua (from 1 January 2022)
Niger	Panama	Palau	Papua New Guinea	Paraguay (until 31 October 2021)
Philippines	Rwanda (until 30 November 2022)	Seychelles	Sint Maarten	Thailand (until 31 March 2022)
Togo	Trinidad and Tobago	Tanzania	Vanuatu	Vietnam (from 1 January 2021)

In comparison with the list of non-cooperative jurisdictions applicable for the tax year 2021, Barbados and the Maldives are removed from, and Angola, the British Virgin Islands, and Nicaragua are added to the 2022 tax year list. Further, Mauritania, Rwanda and Thailand are removed from the list effective 1 August 2022, 1 December 2022 and 1 April 2022, respectively.

Preferential Tax Regimes

Preferential tax regimes are defined as those with a corporate tax rate equal to or less than 60% (50% until 31 December 2018) of Greece’s corporate tax rate (the current tax rate is 22%, reduced from 24% effective 1 January 2021).

Greece on 19 December 2023 gazetted a list of jurisdictions with preferential tax regimes. The list applies for the tax year 2022 and consists of the following:

Albania	Anguilla	Andorra	Bahamas	Bahrain
Barbados	Belize	Bermuda	Bonaire	British Virgin Islands
Bosnia and Herzegovina	Bulgaria	Cayman Islands	Cyprus	Gibraltar
Guernsey	Hungary	Ireland	Isle of Man	Jersey
Kosovo	Kyrgyzstan	Liechtenstein	Macau	Maldives
Moldova	Monaco	Mongolia	Montenegro	Marshall Islands
North Macedonia	Paraguay	Qatar	Saba (NL BES)	Saudi Arabia
St. Eustatius (NL BES)	Sri Lanka (removed from 1 January 2021)	Timor Leste	Tokelau (effective 1 January 2022)	Turkmenistan
Turks and Caicos	United Arab Emirates	Vanuatu

In comparison with the list of jurisdictions with preferential tax regimes applicable for the tax year 2021, Tokelau is added to the 2022 tax year list.

Beneficial Ownership Register

On 30 July 2018, Greece introduced the requirement for legal entities having a registered office in Greece to maintain adequate, accurate, and current information on their ultimate beneficial ownership in a special register to be kept at the registered offices of the legal entities.

Legal entities having their registered office in Greece or carrying out taxable business activities in Greece maintaining the special registry on their ultimate beneficial ownership are required to be linked to the Central Registry. However, companies listed on a regulated market or on a multilateral trading mechanism are not required to maintain a special register on their ultimate beneficial ownership since they are automatically registered with the Central Securities Depository. The ultimate beneficial ownership registry commenced operation on 3 March 2020, and entities were required to register by 1 May 2020.

On 6 October 2020, the Ministry of Finance incorporated the Fifth EU Anti-Money Laundering Directive (2015/849) into Greek law. The new rules impose certain obligations on the ultimate beneficial owners (UBOs) of legal entities, including the following:

The UBOs of legal entities (including, through shares, voting rights, property rights, bearer shares, or control via other means) are required to provide such legal entities with all the necessary information for the legal entities to comply with the anti-money laundering and counter-terrorism financing regulations. Earlier, only the legal entities were obliged to collect the required information; and
The level of access that the public may have to the information on UBOs registered with the Central Registry differs depending on whether the person has a legitimate interest or not. However, the UBOs have the right to justifiably restrict the access to all or part of the information held with the Central Registry, to the extent that such access would expose the UBOs to a disproportionate risk of fraud, kidnapping, blackmail, violence, or intimidation, or where the UBO is minor or incapable.

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