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During the last couple of months, there have been many
interesting developments in corporate tax matters; we have selected
a few which we summarise below
Personal and joint liability of directors – lack of fault
clarified in Decision A.1082/2021
Decision A.1082/2021 issued by the IAPR pursuant to the
applicable legislation, clarified which persons should be excluded
from directors’ joint liability due to lack of fault,
although such persons are in principle considered to fall within
the ambit of the provisions of article 50 of the Code of Tax
Procedures (“CTP”) regarding personal and joint
liability of directors.
As per the Decision, this lack of fault assessment would be
relevant in the context of a tax audit, whereby the competent tax
authorities in each case should examine whether the persons are
found to have lack of fault, potentially falling under any of the
indicative cases outlined below. This examination should in any
case take place before the imposition of any measures on the basis
of joint liability rules under article 50 of the CTP.
In this respect, according to the indicatively enumerated cases,
the above-mentioned persons should in principle be deemed to have
lack of fault indicatively in case of:
- Liquidation of the managed legal person according to a special
provision of law or a court decision setting the time and method
for satisfaction of the creditors; liquidator’s liability for
debts created during his/her term should however be examined;
- Existence of an irrevocable acquittal of a criminal court or
certain similar judicial authority decisions which assess a lack of
- Appointment of an individual as the legal representative of a
foreign legal person, which does not have a permanent establishment
in Greece, for the purpose of fulfilling procedural obligations of
a foreign legal person in Greece or the processing of specific
- In cases in which persons who, although holding one of the
positions provided in par. 1 of article 50 of the CTP, do not have
actual involvement in the administration / management of the
affairs of the legal person;
Guidelines on Statute of Limitation period for stamp duty –
In Circular E.2049/2021, tax authorities
provided clarifications with regard to the Statute of Limitation in
respect of stamp duty for periods as from 01.01.2014, governed by
the provisions of article 36 of the Code of Tax Procedures, while
Circular E.2147/2020 should be relevant for periods until
Specifically, it is clarified that the State has the right to
assess stamp duty in principle within 5 years, starting from the
end of the year during which the stamp duty return was due to be
Exceptionally, for tax years as from 01.01.2018 onwards, the SoL
period may be extended to 10 years from the end of the year within
which the deadline for filing the stamp duty return expires in the
- if no tax return has been filed within the 5-year period.
- if any new or not possibly known information within the 5-year
period comes to the attention of any Tax Administration Service,
based on which it appears that the actual tax liability exceeds the
one determined by a previous tax assessment and solely for the
matter to which it relates.
Guidelines on the tax exemption of capital gains arising from
the disposal of participations at the level of legal persons –
In Circular E.2057/2021 the tax
authorities provided clarifications with respect to the application
of article 48A of the ITC, which introduced the capital gains
participation exemption regime into domestic legislation. According
to this rule, capital gains derived by Greek tax resident legal
entities from the disposal of participations as from 1.7.2020
should be income tax exempt provided that specific conditions are
cumulatively satisfied at the time of transfer, aligning with the
relevant conditions of the EU Parent-Subsidiary Directive.
Specifically, the transferred legal person should be tax resident
in Greece or in the EU, should take one of the legal forms provided
for in the Directive (SA (AE) or Limited Liability Company (EPE) or
Private Company (IKE) or partnership (OE, EE)), whereas a minimum
participation of ten per cent (10%) and a minimum holding period of
at least twenty-four (24) months should be in place.
To this end, it is clarified that the starting point of the
minimum holding of 10% is the date, during which the said holding
is acquired irrespective of the acquisition method, while any
corporate transformation resulting to universal succession does not
affect the 24-month holding period calculation.
The Circular further clarifies that the disposal of shares
includes any act of transfer such as the sale, the contribution of
shares to cover or increase the capital of a company, the exchange
of shares and the transfer of shares within the context of
corporate Law 4548/2018 for capital decrease or dividend
distribution in kind.
It is highlighted in the Circular that the provisions of article
48A of the ITC should be applicable to income earned as from
For monitoring purposes, the amount of the tax exempt capital
gains resulting from the transfer of participations should be
recorded in a special reserve account by legal persons maintaining
double entry books, regardless of the adequacy of profits, even in
situations where the legal persons are loss-making.
In case of distribution of said reserve, a 5% dividend
withholding tax is applicable to dividends, with the possibility of
being further exempt by application of the EU Parent-Subsidiary
Expenses incurred in relation to the transfer of participations
under article 48A of the ITC (e.g. notarial expenses, taxes,
third-party fees, etc.) should not be tax deductible, on the
rationale that capital gains arising from the disposal of said
participations are tax exempt.
Losses arising from the disposal of participations may be tax
deductible under the condition that they have been subject to
valuation until 31.12.2019 and they have been recorded in the books
or the audited financial statements of the company. For the
recognition of the loss from the transfer of participations, the
transfer should take place from 1.1.2020 to 31.12.2022 (final loss)
and further the transferred participations should exist and be
evaluated on 31.12.2019.
Credit of tax paid abroad in priority pursuant to Double Tax
Treaties – Circular E.2089/2021 endorsing recent Supreme Court
Pursuant to Circular E.2089/2021,
important clarifications have been provided with respect to the
possibility of crediting the tax paid abroad by persons falling
within the scope of article 45 of the ITC (“Greek taxable
Having regard to the Decisions 652/2020 and 653/2020 issued by
the Supreme Administrative Court, which assessed the deduction of
foreign taxes and the application of domestic provisions of Law
2238/1994 (former ITC, applicable until tax year 2013) in
conjunction with the Greece – Cyprus Double Tax Treaty, as
well as the fact that the provisions of the former ITC are
substantially similar to the respective provisions of the current
ITC (Law 4172/2013), the Circular clarifies the following:
_States with which Greece has concluded a Double Tax Treaty:
- The tax paid by a Greek taxable legal person in a country with
which Greece has concluded a Double Tax Treaty (DTT) for income
that arises and is taxed there according to the relevant DTT, is
deducted from the total amount of tax due by this person in Greece,
under the terms and conditions and up to the amount defined by the
applicable provisions of the relevant DTT that provide for the
credit of the tax.
- Such tax paid abroad is deducted in priority over the other
taxes of par. 3 of article 68 of the ITC.
- In case that after the deduction of the other taxes a credit
balance arises, the difference is refunded.
_The rationale behind the priority in the deduction of the
foreign tax paid over the other taxes lies in the overriding power
of the DTT provisions over the domestic ITC provisions.
_States with which Greece has not concluded a Double Tax
- For the tax paid by a Greek taxable legal person for foreign
income arising in a country where there is no DTT in place with
Greece, the clarifications provided with Circular 1060/2015 would
be still applicable.
- This means that such tax should be deducted last,
after the other two categories of taxes from the
total tax due following the order of priority of the domestic
provision, i.e. a) the tax withheld, b) the tax prepaid and c) the
tax paid abroad.
Guidelines on the treatment of foreign tax losses deriving from
an EU/EEA permanent establishment – Circular E.2100/2021
allows to offset when they are incurred at the level of the
In Circular E.2100/2021 the tax authorities provided
clarifications with respect to the treatment of losses derived from
abroad from the exercise of business activities through a permanent
establishment, in accordance with article 27 par. 4 of the ITC.
Foreign losses may not be utilised for the calculation of a tax
year’s profits or be offset against future profits, with the
exception of losses arising from business activities exercised
through a permanent establishment situated in an EU/EEA country
with which Greece has concluded a DTT, according to which profits
from business activities are not treated as tax exempt.
The Circular makes reference to the C (2019) 4841/25.7.2019 Note
of the Commission, contesting the formerly applicable guidelines
and interpretation provided with Circular 1200/2016, and now
clarifies that losses arising from business activities exercised
through a permanent establishment situated in an EU/EEA country
should be taken into account for the calculation of the Head
office’s taxable income at the time when the losses are
incurred at the level of the permanent establishment. As per the
previously applicable position, losses could be taken into account
only upon discontinuation of the permanent establishment, a
position adopted on grounds of avoidance of double usage of the
It is further clarified that in order for such foreign losses to
be utilised, said losses need to be separately recorded and in a
way so that the country of the losses’ origin may be easily
identified each time.
Furthermore, regarding non-EU permanent establishment losses,
Circular 1200/2016 would still be relevant, providing that such
losses may not be utilised for the calculation of a tax years
profits or be offset against future profits.
Guidelines on the deductibility of corporate social
responsibility expenses – Circular E.2107/2021
The IARP has provided by virtue of Circular
E.2107/2021 clarifications with respect to the
application of the provisions of article 22 ITC regarding the tax
deductibility of expenses for corporate social responsibility
In principle, corporate social responsibility expenses are
deductible to the extent that the general deductibility rules
provided in article 22 of the ITC are satisfied, provided also that
business should have generated accounting profits in the tax year
in which the CSR costs are incurred (with the exception of CSR
actions at the request of the State). In the past, Circular
1113/2015 provided that corporate social responsibility costs are
considered to be for the benefit of the business and in the scope
of ordinary commercial transactions, therefore qualifying them
eligible to be tax deductible (subject to the rest of the
conditions of article 22).
The Circular provides further that CSR definition and framework
has been determined in accordance with the Announcement issued by
the European Commission on 25.10.2011 (COM (2011)681) as well as by
International Organisations, such as the OECD and the UN.
In accordance with the guidance, charities, simple donations or
sponsorships, such as charitable actions, commercial sponsorships
through which businesses promote their brand or products or actions
aiming at achieving public relations, do not constitute CRS
Law 4799/2021 introduces reduction in corporate income tax rate
among other tax changes previously announced by the Greek
Government – clarifications provided with Circular
A number of changes have been introduced by virtue of Law
4799/2021 including the announced income tax measures aiming to
support affected households and businesses. Such measures are also
anticipated to serve as a bridge to the post-coronavirus era by
attracting new investments and leading to economic growth.
The key changes on taxes introduced by Law 4799/2021 can be
summarised as follows:
- Reduction of the corporate income tax rate applicable to all
legal persons and legal entities from 24% to 22% (except for Greek
credit institutions subject to a special regime concerning deferred
tax assets) – effective as from the tax year 2021.
- Reduction of the income tax advance payable by legal persons
and legal entities from 100% to 80% – effective as from the tax
year 2021, i.e. the advance tax payable in 2022 will refer to 80%
of the tax due for tax year 2021.
- Especially for the tax year 2020, the income tax advance
payable by legal persons and legal entities is further reduced to
- Increase of the income tax advance payable by domestic credit
institutions and branches of foreign credit institutions to 100%
for the tax year 2020 onwards.
- Reduction of the income tax advance payable by individuals
exercising business activities from 100% to 55% – effective as from
the tax year 2021.
- Extension of the suspension of the special solidarity
contribution payable by individuals in the private sector until the
tax year 2022.
Annual CIT return; guidelines just issued
_The deadline for the filing of the annual income tax returns by
legal entities for the tax year 2020 expires on 27 August 2021. The
CIT ensuing from such returns is payable in eight equal monthly
instalments; the first two of which being due by the end of August
2021 and the remaining six instalments being due by the last
working day of the subsequent 6 months.
_Ministerial Decisions A. 1128/2021 and A.1112/2021, as well as
Circular E. 2112/2021 recently issued provide the content of N and
E3 forms of the annual income tax return, as well as necessary
guidance and instructions for the completion thereof for the tax
year 2020. Among others, N and E3 tax forms have been adapted to
cover certain legislative amendments that took recently place in
the ITC as well as special provisions regarding Covid-19
tax-related regulations enacted in 2020.
_Amendments introduced in the forms of the annual income tax
return for the tax year 2020 indicatively include:
- The field of the income tax advance has been reduced to
- New fields have been added for amounts related to tax
incentives and super-deduction of expenses and depreciation
provided in articles 22B, 22Γ, 24, 71ΣΤ and 71Z of
the ITC (e.g. super-deduction of specific advertisement expenses
incurred in 2020, rental expenses and depreciation for the use of
zero or low emission electric cars as well as set-up and operation
costs of the charging stations for same, expenses for the
implementation of e-invoicing through certified E-invoicing
- Tax-free amounts of subsidies, indemnities and deductions
granted due to Covid-19 pandemic (e.g. deductions for timely
payment of tax liabilities, reimbursement for non-collection of
rents, non-refundable amounts of the financing scheme in the form
of refundable advance, standard costs subsidy etc.) will have to be
declared in special fields added in said forms;
- Two separate codes are provided for the declaration of foreign
tax amounts depending on whether or not a DTT exists, while a new
table has also been inserted for additional information on the
foreign tax declared (country, type of income, foreign tax amount
paid and foreign tax amount allocated to the Greek income
- New fields have been inserted for the completion of information
related to the amounts and conditions of capital gains
participation exemption for the purposes of application of article
48A of the ITC.
- Ministerial Decision A. 1054/2021 postponed further the
mandatory data transmission to the myDATA platform as of 1 July
2021 instead of 1 April 2021. Transactions of the first semester of
2021 will still have to be transmitted by 31 October 2021 so that a
full year’s transactions are uploaded to the e-books
- Additional guidelines and clarifications on various operational
and technical aspects of the system have also been released by the
Independent Authority for Public Revenue (IAPR) via an updated
Q&A available on their website. These mainly refer to the
applicable transmission methods, to codification of specific types
of transactions (e.g. imports/exports, intracommunity transactions
etc.) and to timing aspects in the reporting of transactions.
- Most importantly, the IAPR has provided guidance in relation to
the imposition of sanctions in case myDATA requirements are not
met. In particular, it has been clarified, in line also with the
existing legal framework, that no penalties and sanctions are to be
imposed in case of non-compliance with the myDATA obligations. This
also captures any irregularities related to overdue or inaccurate
submissions for 2021.
Tax depreciations of costs and deductibility of expenses for
businesses affected by the Covid-19 pandemic – Circular
By virtue of Circular E.2110/2021,
guidance is provided with respect to the tax depreciations and the
deductibility of expenses effected at the level of businesses whose
operations have been suspended by virtue of State Decision for a
certain period of time due to the Covid-19 pandemic and the
respective measures to limit its spread.
In specific, the following cases are mainly addressed:
- Fixed assets: Legal persons may perform tax depreciations even
for the months of the tax year during which they were not
operating, given that fixed assets were not in use during all
months of the tax year due to the extraordinary conditions created
by the Covid-19 pandemic, while such fixed assets were readily
available to operate during the time of the suspension of
operations. The same applies also to companies that after the
period of suspension decided not to reopen, assessing the
unfavorable conditions created by the Covid-19 pandemic (limited
economic activity, low expected revenues, high operating
- Invoiced expenses related to cancelled or postponed events:
Expenses incurred at the level of legal persons, which were related
to events that have been cancelled due to the conditions created by
the pandemic (e.g. airplane tickets, rental of conference /
exhibition venues, etc.) are deductible in the tax year to which
they relate, provided that the conditions laid down in Articles 22
and 23 of the ITC are met, irrespective of the fact that the
respective service was not provided.
- On the contrary, in case the specific events were postponed,
relevant expenses are deductible in the tax year in which the
relevant services will be provided.
- It is noted that businesses should be able to evidence by any
appropriate means that the suspension of their operation or the
cancellation of events, such as conferences, exhibitions, etc.,
which have already been invoiced, constitutes a result of the
extraordinary circumstances caused by the pandemic.
- Social security contributions: Given that for 2020 the deadline
for the payment of social security contributions due by the
employers has been extended in the context of measures to address
the negative effects of the pandemic, these contributions, if paid
on time and up to the deadline for the preparation of financial
statements, are deducted from the gross revenue of companies in the
tax year to which they relate.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.