GREEK LAW DIGEST

200 i. Distribution of dividends; Distribution of dividends is subject to a withholding tax at a rate of 15%, the tax obligation not being exhausted for Greek SAs. Pursuant to the law, intragroup dividends distributed by Greek SAs are totally exempt from tax withholding, provided that: (a) the recipient is covered by Parent – Subsidiary Directive (2011/96), is seated in an EU member state and is subject to one of the taxes provided in said Directive, (b) the recipient holds a minimum participation of 10% in the distributing company’s capital, shares, voting rights or profits rights, (c) the aforementioned minimum participation is held for at least twenty-four months. Exemption may apply as well before lapse of minimum required holding period upon providing cash guarantee equal to the amount of tax exemption. However, such exemption is lifted in cases of ‘non-genuine arrangements’ (i.e., arrange- ments that have not been put into place for valid commercial reasons reflecting economic reality). ii. Royalties, interests; Income from royalties and interest is generally taxable at a rate of 20% and 15% accordingly, the tax obligation not being exhausted for Greek SAs. Intragroup royalties or interests paid by Greek SAs are totally exempt from tax withholding, provided that: (a) the recipient is covered by Interest-Royalties Directive (2003/49), is seated in an EU member state and is subject to one of the taxes provided in said Directive, (b) the recipient holds a minimum participation of 25% in the remitting company’s capital, shares or voting rights, (c) the aforementioned minimum participation is held for at least twenty- four months. Exemption may apply as well before lapse of minimum required holding pe- riod upon providing cash guarantee equal to the amount of tax exemption. However, such exemption is lifted in cases of ‘non-genuine arrangements’ (i.e., arrange- ments that have not been put into place for valid commercial reasons reflecting economic reality). iii. Directors’ Income; Directors’ income is taxed as salary. Remuneration paid out of the company’s net profits is treated for tax purposes as dividend. iv. Entrepreneurs fees; Corporations must withhold a tax of 20% calculated on the fees of self – employed persons (lawyers etc.). Are there thin capitalization rules? According to the New CIT, regarding tax year 2017, net deductible interest 6 is limited to 30% of taxable profits before interest, taxes, depreciation and amortisation (EBITDA). However, said limitation only applies if net interest exceeds the amount of € 3 million. Dis- allowed interest expenses may be carried forward with no time limit. Credit institutions as well as leasing and factoring companies are exempt from said rules. Are there any transfer pricing rules? There are transfer pricing rules in the Greek legislation. These rules in general adhere to the OECD Guidelines and recognize the arm’s length principle. The New CIT explicitly refers to OECD General Principles and Guidelines for intragroup transactions with regard to the 6. Net interest is defined as the amount by which interest expenses exceed interest revenues.