Greece updated its classification criteria for R&D expenditure for the first time in 20 years to bring it up to speed with OECD guidelines.
The official gazette's R&D conditions were amended in July 2017, aligning Greece with the common approach adopted by other EU jurisdictions. The last time R&D expenditure legislation was updated was in 1987.
Qualifying taxpayers are granted a 130% super deduction for eligible expenses within the areas of basic research, applied research and experimental development. The new criteria apply from fiscal year 2017 onwards.
Modernising policy is vital for the country to continue its recovery from the economic crisis and further encourage local and foreign investment.
"Greece is under financial distress and has a number of commitments towards creditors who have financed the country," said Daphne Conzonis, partner at Zepos & Yannopoulos, Taxand Greece.
In a development which should provide greater tax certainty for businesses, the Greek Administrative Supreme Court ruled in June 2017 that the Greek tax authority's common practice of consistently extending the five-year statute of limitation period was unconstitutional.
"The decision is of major importance to the Greek taxpayers and to the Greek tax system," commented Stephanos Mitsios, head of tax at EY. "This has been a common problem of the past with the Greek tax authorities auditing and many times re-auditing tax years that should have been considered as closed for the purposes of tax audit."
"It is, therefore, a very important step for Greek taxpayers and for potential foreign investors in order to establish trust and legal certainty to the Greek tax legislative framework," he added.
Another reform implemented in April 2017 updated guidance on M&A provisions of the income tax code. The reform included updates to the following types of transactions: transfer of assets in exchange for shares; exchange of shares; mergers, divisions and partial divisions; and transfer of the registered office of a European company or a European cooperative society from Greece to another EU member state.
As an EU member state, Greece is a signatory of the multilateral agreement regarding country-by-country reporting (CbCR). The country has taken steps to implement this and, in July 2017, proposed legislation concerning CbCR-specific requirements.
"With this theme in mind, the Greek authorities are becoming more sophisticated," said Conzonis. "This is generating more conversation and more litigation."
Despite Greece's efforts to update transparency and compliance, some tax professionals believe this could be counterproductive.
"There is a trend of high-net-worth individuals that our firm is working with, including Greek nationals, who are relocating outside of Greece to escape the aggressive tax authorities," said George Naskaris, head of tax at Koutalidis Law Firm. "This also applies to small and medium-sized entities that are migrating outside of Greece. I think this trend will continue, because the tax environment is very hostile and aggressive."
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What's most needed in the global tax environment is also most elusive: Confidence. Deloitte helps clients anticipate change to see through uncertainty and to decide on the future path. From best practices to innovative tools, from regulation to strategy, from people to disruptive technology, Deloitte helps clients connect all the critical pieces for success.
The Greek tax practice offers a full range of tax services and employs more than 180 professionals. In the last year, the Greek firm also expanded its service offerings to legal services, particularly in the areas of corporate and commercial law, mergers & acquisitions, and data protection.
Our tax professionals advise large local and foreign enterprises on their local, inbound and outbound tax & legal issues and offer effective and innovative tax solutions. They look at challenges in new ways and help clients see opportunities and lead with confidence.
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|Corporate Income Tax||29%|
|Capital Gains Tax||29%|
|Net Operating Losses (years)|
|Bank interest||15%||B C|
|Interest on treasury bills and corporate bonds||15%||B C|
|Repos and reverse repos||15%||B C|
|Paid to Greek legal entities||15%|
|Paid to Foreign legal entities||15%||C D|
|Royalties from, for example, patents, know-how||20%||C D|
|Technical service fees, management service fees, consulting service fees and fees for similar services||20%||F|
A) The 10% withholding tax rate applies to dividends and interim dividends distributed by a Greek corporation (anonymos eteria, or AE; (in certain countries, a corporation is referred to as a société anonyme, or SA) and profits distributed by a Greek limited liability company (eteria periorismenis efthinis, or EPE). This 10% withholding tax is subject to rates applicable under double tax treaties or under the European Union (EU) Parent-Subsidiary Directive (amended by Directive 2011/96/EC).
B) This 15% withholding tax is subject to rates applicable under double tax treaties or under the EU Interest-Royalties Directive.
C) This is a final tax if the beneficiary is a legal person (for example, a company) or legal entity that satisfies both of the following conditions:
D) This 20% withholding tax is subject to rates applicable under double tax treaties or under the EU Interest-Royalties Directive. No tax is withheld on payments of royalties made to legal persons or legal entities that have their tax residence in Greece or that have a Greek permanent establishment in Greece.
E) If the 20% withholding tax does not exhaust the final Greek corporate income tax liability of the beneficiary, it is credited against the beneficiary's final Greek corporate income tax liability.
Panayotis Bernitsas is managing partner at Bernitsas Law Firm. The tax team of three advises private and public entities and individuals. The firm is particularly adept at advising on tax planning for high-net-worth individuals, and on relocation matters.
Associate Fotodotis Malamas has been advising Acun Medya since November 2016 in a corporate tax case. The client required assistance with its reality show contracts within Greece and Turkey. The team assisted the client combatting issues that had arisen due to the restructuring of contracts in relation to compliance with TV programming tax provisions.
Since February 2017, Bernitsas and Malamas have assisted Vinci and Gefyra SA in a tax dispute. The case concerns litigation that arose from corporate income tax on a special purpose tax reserve.
Deloitte's tax team in Greece is headed by managing partner Maria Trakadi. The team comprises six partners and 152 professionals. Seven tax experts joined the team in the last year.
The firm assists clients in the areas of business tax, international tax, transfer pricing, M&A, indirect tax, global employment services, private company services, R&D, government incentives, tax management consulting, business process solutions, payroll services and tax controversy.
Partner Stelios Kyriakides and senior tax manager Kyriaki Dafni advised clients on an indirect tax case in April 2017. The matter involved a local subsidiary of a large multinational group and a $1.28 billion concession infrastructure project. They examined the extent to which VAT and stamp duty applied to each agreement within the project.
Partner Eftichia Piligou advised a major client on a tax dispute in July 2016. This involved preparing a defence case for a tax and transfer pricing audit for the years of 2010 and 2011. The client saved more than $4.1 million in income taxes and penalties.
DFK Global Advisory Solutions offers clients in Greece a broad range of tax services. The firm is member of the DFK international network, which has a presence in more than 80 countries. The firm assists in advisory services, compliance, assistance with the Ministry of Finance, reimbursement of unduly paid taxes, tax planning, due diligence and audits.
Dryllerakis & Associates is Baker McKenzie's Greek associate practice and cooperates with the firm in tax matters.
Partner Sophia Grigoriadou leads the tax team of 10. The group comprise three partners and seven tax experts. The 10 professionals all practice in the tax areas of indirect tax, corporate tax and disputes, and four specialise in accounting and compliance.
The firm provides services in tax planning, litigation, accounting law, transfer pricing. The firm also has a strong criminal law branch covering issues such as tax evasion, anti-money laundering and unpaid debts to the Greek state.
Grigoriadou and associates John Papadakis, Dimitris Karavas and John Gkotsis are advising Dimon Hellas and Alliance One in a corporate tax deal. The team is assisting the client on part two of a re-audit of their company and its former subsidiary. The reports covered both companies for financial years 2001-2006, and the project is valued at approximately $45 million for the years audited.
Partner Stephanos Mitsios is the head of tax at EY. He joined the firm in 1983. The tax team comprises six partners and 148 other professionals who advise clients within the industries of energy and utilities, fast-moving consumer goods (FMCG), financial services, life sciences, manufacturing and technology, media and telecommunications (TMT), among others.
Mitsios and senior manager Ilias Sakellariou advised a leading Greek telecommunication and technology multinational company in March 2017. The $600 million corporate tax project concerned cross-border structuring of bonds in Luxembourg. The funds ran through the jurisdictions of Luxembourg, Norway, Cyprus, Greece and the US before they were distributed to the parent company of the group.
In another matter, partner Tassos Anastassiadis and senior manager Maria Rigaki advised a multinational company on a $22 million tax dispute. The case was related to the deduction of income tax paid outside Greece, and the team scrutinised Greek income tax legislation and the relevant rules on double tax conventions.
Fortsakis, Diakopoulos, Mylonogiannis & Associates is based in Athens. The practice comprises four partners and 20 lawyers.
The firm is advising Verizon on the process of transferring its accounting functions out of Greece and in particular regarding tax law procedures affected by the relocation of the accounting function of the Greek subsidiary.
The firm offers tax services within the areas of income tax obligations, planning, optimisation, VAT, transfer pricing, the implications of tax legislation on real estate sale and purchase, inheritance, donations and parental donations, support in tax audits, representation in judicial and extra-judicial disputes and scientific and academic analysis.
Pantazis Karamanolis is the managing partner at Karamanolis & Associates. The firm advises clients within the consulting industry, as well as banks based in Greece.
Koutalidis Law Firm's tax team was founded in 1930. The department is led by partner George Naskaris. Naskaris works with one partner and two other professionals, who advise large international financial services groups in addition to other industries.
The team consults on corporate tax, property tax, investment funds and securities tax, employment tax and tax disputes.
Naskaris, partner Nikos Salakas, associates Effie Papoutsi and Dimitris Kalyvas advised on the €142 million ($169 million) sale and transfer of a hotel-owning entity in December 2016. Alpha Bank A.E sold and transferred 97.3% of its listed subsidiary Ionian Hilton Enterprises, to the purchasing company Tourism Enterprises of Messinia and DMarine Investments Holding. The team advised Alpha Bank A.E. on the international bidding process, transaction related tax issues and competition law issues.
Partner Angela Iliadis leads the tax practice at KPMG. Iliadis joined the firm in 1990 and became a partner in 2001. Partner Georgia Stamatelou, who joined the firm in 2008, is another key contact.
The team assists local and international businesses and investors in tax advice and planning services, direct and indirect tax services, double tax treaty assistance, cross-border structuring of transactions and investments. The practice also offers advice on transfer pricing and documentation.
Photopoulos & Associates is based in Athens and managed by George Photopoulos. The firm offers clients auditing, accounting and legal services. Lawyer Elli Papadimitriou is a key contact, she joined the practice in 2005.
Mary Psylla is the partner in charge of the tax and legal department at PwC in Greece. Psylla is experienced in tax, finance and private equity deals and proficient in M&A transactions, tax planning and general matters related to indirect and direct taxation.
The Athens and Thessaloniki offices offer a broad range of tax services, including corporate income tax, indirect taxes, M&A, tax compliance, real estate compliance, finance, treasury and securitisation, international tax services, transfer pricing and international assignment services.
Nikolaos Siakantaris has been the managing partner of Unityfour's practice in Greece since 2007. Siakantaris has been active in tax since 2001 and has a Big 4 background. He is proficient in the services of accounting, payroll, compliance, advisory and VAT.
Another key contact is tax lawyer Martha Papasotiriou, who joined the firm in 2015. Papasotiriou is experienced in tax advice, international tax, transfer pricing and cross-border restructuring. She is overseeing the expansion of TP services at the firm.
The independent firm consists of 19 professionals who are specialised in tax and compliance services.
Siakantaris, Papasotiriou and Dimitris Moraloglou consulted an ultra-high-net-worth Greek family on a tax audit in June 2017. The case concerned the opening of bank accounts for the family. There were audits of transactions worth $20 million between 2004 and 2012, and the team justified these transactions.
In May 2017, Siakantaris and accounting director Ioanna Tsiaka advised a client on a VAT refund and achieved the client $1.6 million in compensation, which was imposed on goods that were afterwards exported.
Zepos & Yannopoulos, Taxand Greece's tax team is led by Yerassimos Yannopoulos. He joined the practice in 1994. The group comprises seven partners and 27 additional tax experts working in indirect tax, corporate tax, disputes, compliance and accounting. Seven professionals joined the team in the past year.
Partner Daphne Cozonis is assisting Piraeus Bank on tax issues related to a non-performing loan (NPL) business restructuring, which is a relatively new market in Greece. The tax team is collaborating with the firm's banking and finance team on the project.
Tara Wales, a general manager from from Jet2.com, said: "In Greece we have chosen Zepos & Yannopoulos, both their legal and accounting/tax arms, as they have been able to best provide broad scope tax, accounting, commercial and labour advice."
Another client said: "The Zepos & Yannopoulos team are close to their clients and they proactively connect with them for upcoming changes in tax law. They are willing to support us even if we question them on very short notice and require a quick answer. In a very unpredictable economic environment with many changes in the tax law, the Zepos team has managed to remain updated for all such changes and provided clients the best service."
|Tier 1 - Greece|
|Zepos & Yannopoulos, Taxand Greece|
|Tier 2 - Greece|
|Dryllerakis & Associates|
|Koutalidis Law Firm|
|Photopoulos & Associates|
|Tier 3 - Greece|
|Bernitsas Law Firm|
|Fortsakis, Diakopoulos, Mylonogiannis & Associates|
|Karamanolis & Associates|
|Tier 4 - Greece|
|DFK Global Accounting Solutions|