Businesses in Greece most commonly adopt the forms of a société anonyme (Ανώνυμη Εταιρεία, or ΑΕ) or private company (Ιδιωτική Κεφαλαιουχική Εταιρεία, or ΙΚΕ). The form of a limited liability company (Εταιρεία Περιορισμένης Ευθύνης, or ΕΠΕ) is also available.

All of these forms of companies are referred to as “capital companies” (κεφαλαιουχικές εταιρείες). One of the features that distinguishes them from partnerships is that the liability of their shareholders or members is limited.

Large companies usually take the form of an AE, which – unlike the ΕΠΕ and IKE – is subject to a minimum share capital requirement (EUR25,000). The popularity of the IKE form for SMEs has risen significantly in recent years, as it offers a more flexible structure compared to an ΕΠΕ which is now a form much less frequently adopted. SMEs engaged in service provision and family businesses often take the form of a general partnership (Ομόρρυθμη Εταιρεία, or OE) or limited partnership (Ετερόρρυθμη Εταιρεία, or ΕΕ). Other legal forms are also available (eg, civil partnerships, consortiums) but are less commonly used. 

Corporations and partnerships are taxed as separate legal entities.

In general, business entities are not transparent for fiscal purposes. Exceptions include Greek Venture Capital Mutual Funds (ΑΚΕΣ) and Greek Alternative Investment Funds (ΟΕΕ) (upon a relevant election). Alternatively, such funds can elect to be taxed on an annual basis at a percentage of the difference between the value of their shareholdings on 31 December of each tax year and the cost of acquiring such shareholdings increased by their cumulative operating expenses. Such tax exhausts the tax liability of the fund and of its unitholders as regards income tax for the period of their holding.

The tax of Greek undertakings for collective investment in transferable securities (ΟΣΕΚΑ) is calculated as a percentage of their net assets, and exhausts the tax liability of the undertaking and its shareholders.

The tax of Greek real estate investment companies (ΑΕΕΑΠ) is calculated as a percentage of the average fair market value of their investments. This tax also exhausts the tax liability of the undertaking and its shareholders. Therefore, Greek ΑΕΕΑΠ are not subject to income tax. The form of Greek real estate investment companies (ΑΕΕΑΠ) is used in Greece for pooled investments in large real estate portfolios.

Subject to the operation of double taxation treaties, incorporated businesses are deemed to be resident in Greece if:

• they are formed in accordance with Greek law;
• their registered seat is in Greece; or
• the place of their effective management is in Greece.

The place of effective management is determined on the basis of facts and circumstances, with particular consideration being given to the places where:

• day-to-day business is undertaken;
• strategic decisions are adopted;
• annual shareholders’, board of directors’ and other executive meetings are held;
• books and records are kept; and
• the directors’ place of residence.

The place of residence of the majority shareholders may potentially be considered. The rules on residence do not apply to certain types of entities such as those operating under special shipping regimes.

The ordinary income tax rate is 22% and is applicable to:

• businesses incorporated in the form of an AE, ΕΠΕ or IKE;
• partnerships in the form of an OE or EE;
• other legal persons and legal entities specifically defined in the Income Tax Code such as foundations, cooperatives, civil law societies, consortia, etc; and
• any other legal persons or entities keeping double-entry books.

This does not apply to credit institutions that have opted to apply a scheme to enhance capital adequacy by converting deferred tax assets into deferred tax credits against the Greek state, which are taxed at a rate of 29% for the relevant years.

Business income of individuals who are directly engaged in a business forms part of their taxable basis, including any salary and pension income, and is taxed at a progressive scale ranging from 9% to 44%.

Individuals who transfer their tax residence in Greece for such purpose under tax incentive regimes may benefit from reduced tax rates or exemptions for seven years.

Reduced tax rates are available to companies formed as ΑΕs or ΕΠΕs on certain non-taxed profit reserves formed under growth incentive laws if converted into share capital. Prerequisites for this include, in certain cases, restrictions to ensure the continuity of the relevant company and the preservation of capital.

Each year businesses are obliged to prepay a certain percentage of their income tax due in the form of an income tax prepayment. The applicable percentages are 80% for legal persons and entities, 100% for banks and banking branches and 55% for business income earned by individuals. In the first three years of operations of the above legal persons and banks, relevant prepayment is reduced by 50%. On the other hand, for individuals, relevant prepayment is reduced by 50% only for the first year of operations.

General Principles

The taxable profits of businesses are based on accounting profits, subject to the special rules and classifications provided for in the income tax legislation. In general, taxable profits equate to the aggregate of revenues after subtracting deductible business expenses, depreciation allowed for tax purposes, and certain provisions for bad debts. Certain special rules, such as exemptions in respect of certain dividends and capital gains and interest limitations apply specifically as regards the determination of the taxable profits of legal persons and entities.

In addition, in order to be deductible, all business expenses must have:

• been actually incurred;
• been incurred for business; and
• been properly recorded in the books and supported by adequate documentation.

As of 2023, a minimum level of imputed taxable profits, calculated in accordance with a combination of parameters set in the law, is applicable annually in respect of businesses conducted by individuals.

Non-Deductible Expenses

Categories of business expenses that are not deductible are explicitly defined, and include, among others:

• provisions (except specifically allowed bad debt provisions);
• penalties and fines;
• payments for goods or services exceeding EUR500 if not effected through banking transactions;
• unpaid social security contributions;
• payments to persons resident in the jurisdictions deemed non-cooperative or (other than, in principle, EU and EEA jurisdictions) preferential, unless the taxpayer proves that there is no tax avoidance or evasion; and
• expenses for which the supporting documentation has not been properly transmitted to the Independent Authority for Public Revenue (AADE) through the myDATA platform.

Income Recognition Basis

As a general rule, the profits of businesses are taxed on an accruals basis. Any profits that are distributed or capitalised without having previously been taxed are subject to tax upon such distribution or capitalisation.

R&D Expenses

Subject to a governmental procedure, a super-deduction of an additional 100% of certain expenses for scientific and technological research – including any depreciation of machinery and equipment used for those purposes – is available at the time such expenses are realised. Scientific and technological expenses paid to non-associated, registered start-ups and certain research and innovation centres and universities specified by law are tax deductible by an additional 150%. If they are incurred by micro, small and medium-sized enterprises, they are tax deductible overall by an additional 200% on condition that they correspond to more than 20% of total expenses incurred in the same year; if, within a fiscal year, they exceed the average of the corresponding expenses for the two prior years, they are tax deductible by an additional 215%.

Certain instruments and equipment used for scientific and technological research that are determined through a governmental decision authorised by law can be amortised at a 40% rate annually.

Patents

Profits derived by a business from the sale of assets produced by deploying self-created patents internationally recognised in its name – and from services provided with the use of its own patents – are exempt from corporate income tax for a period of up to three fiscal years from the year in which the relevant revenues were first accrued, while for the following seven years, there is a 10% exemption from the income tax payable on the company’s profits from the exploitation of the patent. The relevant profits are taxed when they are distributed or capitalised.

Green Incentives

Incentives for sustainable development include super-deductions for expenses or increased depreciation related to environmental protection – ie, in relation to zero- or low-emission vehicles or public transportation season tickets. Explicit deductibility for corporate income tax purposes of expenses related to corporate social responsibility (CSR) activities has also been introduced as an incentive for sustainable development.

Audio-Visual and Game Software Development

EU-compliant tax incentives for investments in the production of films, videos and television programmes, in ancillary services, and in the development of source code for computer game software provide for a 30% deduction of eligible expenses incurred in Greece from the taxable income of Greek tax-resident legal persons and entities. The same incentives apply to businesses established in, or operating a branch within, Greece for the purpose of producing audiovisual works, including on a cross-border basis, as well as to foreign companies producing audiovisual works, provided that they contract with a company that is established in, or has a branch within, Greece and operates for the purpose of the full or partial production of audiovisual works.

Creation of New Jobs

Incentives for the creation of new full-time employment jobs are also available and consist of a 50% super-deduction of the relevant social security contributions payable by employers, subject to a maximum limit specified in the law and relevant for specific hires.

Business Parks

Specific tax incentives, such as exemption from real estate transfer tax, are available to entities that acquire property and commence activities in special industrial areas and enterprise parks.

Shipping Tax Regime

A tonnage tax regime applies in respect of ship-owning companies as well as companies chartering bare vessels (bareboat charterers) or companies leasing vessels (ship lessees). The tax is calculated on the basis of the capacity and age of the vessels and exhausts any further income tax obligation of the ship-owning company, bareboat charterer or ship lessee, as well as such entities’ shareholders with regard to income arising from the operation and exploitation of the vessels.

As regards vessels under foreign flags, tonnage tax is imposed only in relation to those vessels that are managed in Greece by foreign companies that have established offices in Greece for such management or by companies established in Greece – in both cases, under a specially regulated regime. Under such regime, the income of such management companies is exempt from tax. In addition, vessels flying flags of EU or EEA member states can also be subject to the tonnage tax regime in respect of defined types of vessels, regardless of the place of management.

Greek companies and foreign companies that have established an office in Greece under the aforementioned special regime and engage in activities other than the management of vessels – for example, brokering in chartering, sale and purchase and building in respect of ships under the Greek or a foreign flag with a total tonnage of more than 500 gross registered tonnes – are subject to an annual contribution calculated on the basis of the amount of funds (in euros or other currency) that is required by law to be imported into Greece annually in order to cover their operating expenses.

Special Regime of Law 89/1967

The cost-plus regime of Law 89/1967, which provides a special framework for the establishment in Greece of shared-services centres rendering certain services specified in the law to associated companies, includes within its scope marketing and consulting services, software development, IT support, data management and storage and computer-based call centres. The regime provides for the full deductibility of business expenses that combine to form the taxable gross revenues for income tax purposes after the addition of a profit mark-up, which cannot be less than 5% and which is acknowledged in advance by the tax authorities. Eligibility under the regime presupposes annual expenditures of at least EUR100,000 and employment of at least four persons (one of whom can be part-time).

State Aid Schemes for Private Investments

The current EU-compliant framework for the establishment of private investment aid schemes for the country’s regional and economic development focuses on 13 specific areas of business activities, including green transition and modern technologies. The law includes state grants in the form of tax exemptions for eligible investments.

Strategic Investments

During 2019, new legislation was introduced with the aim of streamlining the existing framework for attracting strategic investments in all sectors of the Greek economy through the grant of incentives. The rules define strategic investments as those that are capable of producing material quantitative and qualitative results when it comes to expanding employment, reconstructing production, and improving the country’s natural and cultural environment. The legal framework was enhanced in 2021 to include additional categories of investments, such as flagship investments promoting green economy, innovation, technology, and the low-carbon economy and environmental footprint (if implemented until 31 December 2025). These investments are to be financed by the EU Recovery and Resilience Plan for Greece.

Recent legislative amendments expand the framework for Emblematic Investments of Exceptional Importance. The updated rules expand Emblematic Investments to include green, innovative, and low‑carbon projects – ranging from renewables and hydrogen systems to offshore wind and floating PV. The scope now also spans critical raw materials, circular economy initiatives, shipbuilding, and other activities that strengthen Greece’s position in globally competitive industries.

Strategic investments would mostly embrace innovation, competitiveness, comprehensive planning, the preservation of natural resources in the context of the circular economy, and high added value – notably in the business sectors of international trade and services.

The available tax incentives offered (which may vary by category of investment project but typically include):

• the stabilisation of the tax rate for 12 years;
• income tax deferral;
• accelerated depreciation;
• beneficial taxation for expatriate executives; and
• tax exemptions (that may be used over a period of up to 15 years)

Defence

A new super-deduction regime has been introduced by Article 13 of Law 5246/2025 aiming to support investment in defence-related and allied manufacturing units. This includes a 100% super-deduction for qualifying capital expenditure, applicable to all enterprises with a registered seat or branch in Greece. The initial investment must be made in 2026, 2027, or 2028, and the project needs to be maintained in an eligible region for at least five years following completion. Non-compliance may result in the revocation of the tax benefit, with the amount of the claimed super-deduction becoming repayable. The regime operates in line with Commission Regulation (EU) 651/2014 and the General Block Exemption Regulation (GBER), ensuring compatibility with the internal market.

Listing of SMEs

Costs incurred for the listing of very small, small and medium-sized enterprises (SMEs) on the stock exchange shall be deductible for tax purposes at the time of their realisation increased by 100%, whereas the maximum amount of tax benefit shall not exceed EUR200,000 per Article 24 of Law 5193/2025 (adding a new Article 22ΣΤ to the Greek Income Tax Code). The tax incentive covers costs that are directly related to the process of bringing an SME to the regulated market, including:

• due diligence and professional audits (legal, financial, tax) required for the listing process;
• advisory and co-ordination fees paid to intermediaries or consultants managing the listing process;
• taxes, charges and statutory fees directly arising from the listing;
• prospectus preparation and printing; and
• other related documentation costs necessary for admission to the regulated market.

To qualify for the enhanced deduction, the shares or equivalent listed titles must remain listed on the regulated market for at least ten consecutive years. If they are held for a shorter period, the benefit may be reversed in whole or in part.

The enhanced tax deduction applies to qualifying expenses incurred during tax years 2025, 2026 and 2027.

Tax losses incurred by the conduct of a business within a certain fiscal year can be carried forward to be offset against profits made during the next five consecutive years. Previously untaxed profits that are taxed as a result of their distribution or capitalisation cannot be offset against tax losses incurred in the relevant year.

No carry back is currently available in Greece.

Moreover, no group relief is currently available in Greece. Tax losses incurred abroad can neither be used to determine taxable profit in the same fiscal year nor carried forward – with the exception of tax losses arising from the conduct of business through permanent establishments in EU/EEA member states, provided that the relevant profits are not exempt from Greek income tax by virtue of a double taxation treaty between Greece and the relevant EU or EEA member state.

According to a rule transposing part of the EU Anti-Tax Avoidance Directive into Greek domestic law, subject to a de minimis threshold of EUR3 million annually, “exceeding borrowing costs” are not deductible by local corporations and local PEs of non-resident entities to the extent that they exceed 30% of EBITDA – with a possibility to carry forward the non-deductible portion without any time limitation. “Exceeding borrowing costs” is defined as the amount by which the otherwise deductible borrowing costs of a company exceed taxable interest revenue and other economically equivalent taxable revenue.

Companies that are part of consolidated groups as per Greek Generally Accepted Accounting Practice (GAAP) may deduct all of their exceeding borrowing costs if the ratio between their share capital and total assets is equal to (or higher or lower by no more than) 2% of the group ratio, provided that the method of valuation of all assets and liabilities is the same as in the consolidated financial statements. These companies can also deduct exceeding borrowing costs up to the amount arising from the application to their EBITDA of the group ratio of exceeding borrowing costs (in respect of lending from third parties) over group EBITDA.

The above-mentioned interest limitation rules do not apply to several types of financial undertakings, such as credit institutions, insurance companies, and specific institutions for occupational retirement. Regarding related-party transactions, this rule is applied after any transfer pricing adjustment.

Another restriction on the deduction of interest is that the portion of interest expenses corresponding to any rate exceeding the interest rate for credit lines to non-financial corporations referred to in the most recent Bulletin of Conjunctural Indicators of the Bank of Greece (as at the time of the loan) is not deductible. This limitation does not apply to interest on bank loans or bond loans, nor to interest paid to related parties for which transfer pricing rules shall apply.

There is no consolidated tax grouping regime in Greece.

Capital gains from the disposal of assets (including transfer of shares in other corporations) are fully included in the taxable basis of corporations for income tax purposes in the fiscal year in which they are realised.

Greek legal persons and Greek PEs of non-resident EU/EEA legal persons are exempt from tax on capital gains arising from the transfer of shares in EU Parent–Subsidiary Directive-qualifying subsidiaries (see 6.3 Dividends From Foreign Subsidiaries), including Greek subsidiaries insofar as they hold at least 10% participation in those subsidiaries for a minimum holding period of 24 months. In addition, as of fiscal year 2025, (i) Greek legal persons disposing of shares in qualifying non-EU subsidiaries (see 6.3 Dividends From Foreign Subsidiaries) and (ii) Greek PEs of non-resident, EU/EEA legal persons transferring shares in non-Greek subsidiaries are exempt, under the same conditions, from tax on capital gains arising from such transfers.

Under a grandfather clause, losses arising from the transfer of shares are deductible for tax purposes: (i) as of 1 January 2020 when they arise on the disposal of shares in qualifying EU subsidiaries; and (ii) as of 1 January 2025 when they arise on a disposal of shares in qualifying non-EU subsidiaries, and in both cases they must be incurred up to 31 December 2026. Tax treatment applies to the extent that the losses were reflected in financial-statement valuations performed up to 31 December 2019 for qualifying EU subsidiaries and up to 31 December 2023 for qualifying non-EU subsidiaries, and also on condition, in both cases, that they are recorded in the taxpayers’ books or are reflected in the financial statements audited by certified public accountants.

By virtue of Law 5162/2024, which provided tax incentives on corporate reorganisations, and replaced all previously applicable tax frameworks of Laws 1297/1972, 2166/1993 as well as of Articles 52–56 of L. 4172/2013, capital gains derived from certain qualifying corporate reorganisations – for example, mergers, divisions, partial divisions, transfers of assets and exchanges of shares – are exempt from tax at the time of the relevant operation on certain conditions specified in the law and subject to specific anti-abuse rules.

Value Added Tax

Value added tax (VAT) is levied on virtually all transactions relating to goods and services. The standard VAT rate is 24%, although reduced rates are also available in certain cases (eg, for certain agricultural supplies, hotel accommodation, certain social services, etc). VAT is imposed on the total consideration received for the supply of goods or services, excluding the tax itself. VAT is not a burden for companies with the right to fully deduct input VAT.

Stamp Tax and Digital Transaction Duty

As of 1 December 2024, Digital Transaction Duty applies to certain transactions defined in the law where, in principle, at least one of the transacting parties is a Greek tax resident person or foreign person acting through a permanent establishment in Greece and provided that the relevant agreement or transaction does not fall under the scope of VAT or the scope of certain other taxes defined in the law, such as inheritance or real estate transfer tax. The most common transactions that are subject to Digital Transaction Duty are certain commercial leases, and loans and transfers of business concerns.

Digital transaction duty is applied at different rates, depending on the type of parties to a transaction. Business transactions falling under the scope of digital transaction duty are, in principle, subject to a 2.4% rate applied to their monetary value. The rate for commercial leases is 3.6%.

The Digital Transaction Duty is, in principle, imposed at 2.4% on interest‑bearing and interest‑free loans and on all types of credit, including those deemed equivalent to loans and credit cards, up to a maximum of EUR150,000 per loan. However, the duty does not explicitly apply to interest payments, bond loans under Law 4548/2018, or bank loans.

Real Estate Transfer Tax and VAT

The transfer of real estate, except new buildings, is subject to real estate transfer tax, which is imposed on the higher of the so-called objective value (which is an imputed value computed on the basis of a specific formula provided for in the law) and the actual transfer value agreed, and which is borne by the purchaser. The tax rate is 3%. An additional 3% municipality tax is applied to the amount of the real estate tax, so that the overall tax burden adds up to 3.09%. Reduced rates of real estate transfer tax apply in certain qualifying corporate reorganisations, as provided by Law 5162/2024 (see 2.7 Capital Gains).

Sales of new buildings by businesses are, in principle, subject to VAT at 24%. Between 2020 and 2025, the sale by businesses of buildings that would normally be subject to 24% VAT can be exempt from VAT upon the filing of a relevant application. The exemption covers buildings that have been completed with building permits after 1 January 2006, as well as those built by the end of 2025. Constructors who opt not to apply VAT on a sale waive the right to deduct the VAT on the construction cost. Any non-recoverable VAT can be deducted as an expense for income tax purposes.

Listed Shares Sales Tax

A transfer tax at the rate of 0.1% is levied on sales of shares listed on a regulated market or a multilateral trading facility operating in Greece.

Banking Levy

An annual banking levy, known as the “Law 128 contribution”, is imposed on loans and credits granted by Greek and foreign credit institutions. The applicable rates depend on the type of credit, and range between 0.12% and 0.6%.

Unified Real Estate Tax

Incorporated businesses owning property rights on real estate located in Greece are subject to a unified real estate tax (Ενιαίος Φόρος Ιδιοκτησίας Ακινήτων, commonly referred to as ENFIA), which consists of a main and a supplementary tax. The main tax applies to each property separately and is calculated based on a formula that varies depending on the type and location of the real estate assets and a number of other coefficients set in the law. The basis rate for the main tax (which is then multiplied by set coefficients, depending on the particular case) ranges from EUR0.0037 to EUR16.20 per square metre, depending on the type of property (buildings or land plots).

The supplementary standard tax rate is set at 0.55%, although properties that are used by the taxpayer for their business activities are subject to a supplementary tax of 0.1%. Reduced rates or a number of exemptions are available for specific categories of properties and/or taxpayers (eg, real estate investment companies).

Special Real Estate Tax

A Special Real Estate Tax (Ειδικός Φόρος Ακινήτων) on real estate owned as of 1 January of each calendar year is imposed for the purposes of tackling the ownership of Greek real estate by non-transparent structures. It is imposed at a rate of 15% of the value of the real estate imputed for tax purposes. It is, in practice, not applicable to a great number of incorporated businesses owning Greek real estate, owing to a number of exemptions which are based either on the status of the legal person holding it (eg, listed companies) or on the type of services performed by the entities owning Greek real estate property – eg, legislative amendments extend explicitly the regulated investment vehicle exemption to EU alternative investment funds that fall under the AIFM Directive or on the basis of the disclosure of the ultimate beneficial owners (ie, owners possessing a Greek tax identification).

Capital Accumulation Tax

A special tax is imposed on capital accumulation (φόρος συγκέντρωσης κεφαλαίων) at a rate of 0.2%. This applies to capital in cash or in kind contributed to legal entities of any form in the context of a capital increase. Such tax is not imposed on the capital accumulated upon the establishment of an entity. A duty of 0.1% on share capital is additionally imposed on companies taking the form of an AE in favour of the Hellenic Competition Committee.

Municipal Taxes and Taxes in Favour of Third Parties

Corporations holding or renting real estate may be liable to various municipal taxes/duties, such as cleaning and lighting duties which are collected through electricity utility bills. A property duty is levied by each municipality at a rate ranging from 0.025% to 0.035% on the objective value of immovable property located in the territory of the relevant municipality.

Municipality duties are also imposed on specific types of advertisements and advertising material.

A number of taxes in favour of third parties (such as the Lawyers’ Pension Fund, universities, other funds and non-profit organisations) are applicable to incorporated businesses and other taxpayers, as the case may be.

Entrepreneur’s Duty

Corporations and individuals operating a sole proprietorship have an annual entrepreneur’s duty obligation according to the provisions of Law 3986/2011 which depends on the place of the registered seat, number of business premises maintained and months of operation in the year (around EUR1,000 for the registered seat only).

The entrepreneur’s duty is assessed and rendered payable to the Greek tax authorities upon submission of the annual corporate income tax return.

Closely held local businesses usually operate in corporate forms, as companies with legal personality. SMEs and family businesses often take the form of a general partnership or limited partnership. Operation as a sole proprietorship, with a minimum level of imputed taxable profits annually, is preferred only for very small-scale businesses.

An individual professional is taxed at progressive tax rates, which – depending on the level of the income – may or may not lead to an effective rate that is lower than the combined effective rate of corporate taxation and tax imposed on profit distributions (where applicable). See 3.4 Taxation of Individuals on Shares in Closely Held Corporations for further details.

There are no tax rules that prevent closely held corporations from accumulating earnings for investment purposes.

Dividends

Greek tax-resident private individuals are subject to 5% income tax on profits and dividends from closely held corporations. Profits of small partnerships (in the form of an OE or EE) keeping single-entry books are taxed only at company level, with no further income taxation on profit distributions at the level of partners. AE, EPΕ and IKE companies cannot keep single-entry books.

Capital Gains

Capital gains of Greek tax-resident private individuals derived from the transfer of shares in closely held corporations are subject to 15% income tax. Gains on the transfer of shares in closely held corporations are, in certain circumstances, calculated in an imputed manner set by the relevant rules on the basis of the level of the corporation’s equity.

Capital gains realised by employees and shareholders as a result of transferring shares in non-listed start-up companies purchased through the exercise of stock option rights acquired within a period of five years of the company’s establishment are subject to 5% capital gains tax on the condition that there is a minimum period of three years between the stock options grant and the disposal of the relevant shares. In the case of all other companies except start-ups, employees are subject to 15% capital gains tax on the condition that there is a minimum period of two years between the stock options grant date and the transfer of the relevant shares. If minimum holding periods are not met, the relevant benefits are classified and taxed as employment income. No minimum holding period applies for the capital gains taxation of such gains arising upon transfer of shares acquired for free by an employee in the context of a share award plan.

Capital Losses

Capital losses from transfer of shares and other securities by Greek tax-resident private individuals can be carried forward for five years to be set off against future capital gains deriving from similar transactions only.

Dividends

The individuals’ tax regime established for dividends from shares in closely held corporations also applies to shareholdings in publicly traded corporations. See 3.4 Taxation of Individuals on Shares in Closely Held Corporations for further details.

Capital Gains

Greek tax-resident private individuals are exempt from income tax on gains derived from the sale of exchange-listed shares, except where they hold at least 0.5% of the total share capital and the shares have been acquired on or after 1 January 2009, in which case they are taxed at 15%. See 3.4 Taxation of Individuals on Shares in Closely Held Corporationsfor further details.

Under domestic legislation, legal entities or individuals that are not resident in Greece will be subject to income tax in Greece by way of withholding on Greek-source interest, royalties and dividends. Any tax so withheld exhausts their Greek tax liability. This is provided that they do not have a permanent establishment in Greece to which the relevant profits would be attributable.

Domestic withholding tax rates can be reduced or eliminated if payments are made to beneficiaries in income tax treaty jurisdictions. Greece currently has income tax treaties in force with 58 countries throughout the world. The treaties concluded with the USA and the UK are not based on the OECD Model Tax Convention.

Dividends

Under domestic law, 5% withholding tax applies to dividends. Dividends distributed to qualifying EU parent companies are exempt from any withholding tax, provided that:

• the parent company participates in the subsidiary with a minimum holding of 10% in the capital or voting rights for at least 24 months;
• the beneficiary company receiving the dividend payment is included in the list of companies referred to in Annex I Part A of the EU Parent–Subsidiary Directive;
• the beneficiary company is tax resident in an EU member state and, under the terms of an income tax treaty concluded with a third state, is not considered resident for tax purposes outside the EU; and
• the beneficiary company is subject to one of the taxes listed in Annex I, Part B of the Directive (without the possibility of an option or of being exempt) or to any other tax that may be substituted for any of those taxes.

Until completion of the minimum holding period, a bank guarantee for the amount of withholding tax that would otherwise be due can be deployed instead of payment of the withholding tax and a posterior refund claim.

A special anti-avoidance rule prohibits the withholding tax exemption on the above-mentioned qualifying dividend payments if the exemption is claimed in the context of artificial arrangements that are not put in place for valid commercial reasons reflecting economic reality but, rather, are aimed mainly at obtaining a tax advantage.

Interest and Royalties

Under domestic law, 20% withholding tax applies to Greek-source royalties and 15% withholding tax applies to Greek-source interest.

Interest and royalties paid to qualifying EU associated companies are exempt from any withholding tax, provided that:

• the beneficiary company receiving the interest or royalties participates in the payor with a minimum holding of 25% in the capital or voting rights for at least 24 months, or the payor participates in the beneficiary company with the same minimum holding, or a third company participates in the payor and the beneficiary with the same minimum holding;
• the beneficiary is included in the list of companies referred to in the Annex to the EU Interest Royalties Directive;
• the beneficiary is tax resident in an EU member state and is not considered resident for tax purposes outside the EU under the terms of an income tax treaty signed with a third state; and
• the beneficiary company is subject to one of the taxes listed in the EU Interest Royalties Directive (without the possibility of an option or of being exempt) or to any other tax that may be substituted for any of those taxes.

Until completion of the minimum holding period, a bank guarantee for the amount of withholding tax that would otherwise be due can be deployed instead of payment of the withholding tax and a posterior refund claim.

Listed Corporate Bonds

Interest payments effected as of 1 January 2020 to non-resident individuals and legal entities that do not maintain a permanent establishment in Greece are exempt from interest withholding tax insofar as such interest is on corporate bonds listed on trading venues within the EU or on organised markets outside the EU, provided such markets are regulated by an authority accredited by the International Organization of Securities Commissions.

Based on data from the Bank of Greece, the primary tax treaty countries from which foreign investors make investments in local corporate stock or debt are Germany, France, Switzerland, Cyprus, Italy, the USA, Luxembourg, the Netherlands, and the UK.

Where appropriate documentation (including a tax residence certificate signed by the competent foreign authorities) is available, in practice, it has been rare up to now for local tax authorities to challenge the use of treaty-country entities by non-treaty-country residents.

It should be noted that Greece ratified the OECD Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI), which came into force on 1 July 2021, and has adopted the principal purpose test in order to prevent arrangements and transactions whose main purpose is to obtain the benefits of the tax treaty.

Taxable profits of Greek legal persons and entities are subject to readjustment in the case of transactions between related parties that are not in line with the arm’s length principle.

Most transfer pricing disputes revolved around the applicability of more lenient penalties for failure to comply with transfer pricing documentation requirements and the burden of proving compliance with the arm’s length principle. This latter issue has evolved over time. Administrative courts have confirmed OECD TP guidelines approach that – as long as the taxpayer produces the appropriate transfer pricing documentation – the burden lies with the tax authority, which is required to justify any challenge made to the taxpayer’s position.

More recently, the role of each related party in the development, enhancement, maintenance, protection and exploitation (DEMPE) functions of intangible assets has become increasingly significant to the scrutiny of related-party transactions between domestic licensees and foreign IP-holding entities.

Matters concerning the reliability of comparable data (particularly in cases of financial transactions), the definition of related parties, the use of full or interquartile range, the reasonableness of comparability adjustments and – more recently – the appropriateness of selected transfer pricing methods and allocation keys for expenses have also been coming into the discussion.

As tax authorities focus increasingly on transfer pricing, the discussions surrounding it are expected to increase.

Limited risk distribution arrangements are extensively applied by multinational enterprises doing business in Greece. Tax authorities are carefully scrutinising these arrangements in the context of transfer pricing audits and primarily focusing on whether the return of the local entity can be considered consistent with the arm’s length principle following in-depth reviews of its functional and risk profile. The reliability of comparables is also challenged in this context. In some instances, the tax authorities challenge the selection of the transfer pricing method or of the tested party.

The current legal framework in Greece fully endorses the arm’s length principle, defined in Article 9 of the OECD Model and interpreted by the OECD Transfer Pricing Guidelines, following the revisions introduced as a result of Actions 8–10.

Greek tax authorities have been focusing increasingly on transfer pricing when auditing Greek taxpayers during the past decade. Considering the lack of extensive case law on transfer pricing issues, aggressive approaches are often witnessed on the Greek tax authorities’ part.

International transfer pricing disputes are not often resolved through double tax treaties and mutual agreement procedures. As regards the MAP process, it should be noted that the Greek tax authorities have focused in the most recent years on providing the procedural framework for MAPs and on aligning the domestic framework with the recommendations received in the context of the MAP Peer Review Reports (Stages 1 and 2). Until recently, however, the application of MAPs for transfer pricing was rare and therefore the local tax authorities have yet to develop any consistent practice or view in this respect.

Compensating adjustments are allowed under Greek legislation. Increased scrutiny from the tax auditors should be anticipated insofar as downward adjustments are concerned.

Taxpayers may perform compensating adjustments upon filing their annual tax returns or upon filing amended tax returns within the standard five-year statute of limitation.

If, following a tax audit, an assessment of tax is made against a Greek taxpayer with respect to intragroup transactions performed with another Greek taxpayer that is a related party in the sense of Article 2 of the Greek Income Tax Code, the second related party taxpayer may request a corresponding adjustment to its taxable profits. This is done by filing an amending tax return accompanied by the notification of the relevant tax assessment act against the first taxpayer. A prerequisite for the refund or set-off of tax to the second taxpayer requesting such a corresponding adjustment is the settlement by the first taxpayer of the above tax assessed – ie, payment of amounts of additional tax and penalties assessed. Use of the above rules does not preclude the first taxpayer’s right to challenge such an assessment before the competent authorities.

In general, local branches of non-local corporations are effectively not taxed differently to local subsidiaries of non-local corporations when it comes to their Greek profits. Differences may exist as regards the Greek tax treatment of profit remittances or other payments from a local branch to the non-local corporation’s head office, due to those payments occurring within the same legal entity, as opposed to payments from a local subsidiary, which may be subject to withholding tax, subject, however, to applicable exemptions (see 4.1 Application of Withholding Taxes for further details).

Capital gains of non-resident corporations on the sale of stock in local corporations are not subject to tax, provided that the stock is not held through a PE in Greece.

Under a rule whose application has been suspended several times (and is still suspended until 31 December 2026), gains derived from the transfer of real estate property – as well as from the transfer of shares in companies that derive more than 50% of their value, either directly or indirectly, from real estate by individuals who are not engaged in business activities – are subject to capital gains tax at 15%. In view of the consecutive suspensions, it has not been clarified whether such rules may also apply to non-resident companies directly or indirectly transferring stock in local corporations deriving more than 50% of their value from Greek real estate.

For completeness, it is noted that under domestic legislation, foreign tax-resident individuals are exempt from tax on capital gains derived from the sale of shares in Greek companies, provided that such shares are not effectively connected with a permanent establishment in Greece and provided they are resident in a jurisdiction that has a double taxation treaty with Greece.

Tax losses carried forward are forfeited if the direct or indirect participation in the capital or voting rights of a local company changes by more than 33% within a fiscal year, while at the same time – within the same or the next fiscal year – the local company changes its business activity in a way that affects more than 50% of its turnover when compared with the turnover prior to the change.

Tax losses are not forfeited if the company is able to prove that the activity change is economically justifiable in the context of the company’s business – for example, cost-cutting, achieving economies of scale, or intercompany restructuring.

Currently, no formulas are used to determine the income of foreign-owned local affiliates selling goods or providing services. Tax authorities can determine taxable income through indirect techniques – such as analysing the price-to-turnover ratio or cash position – and other techniques set out in the legislation.

Taxable profits are subject to re-adjustment in the case of transactions between related parties that are not in line with the arm’s length principle. A Greek taxpayer may request a corresponding adjustment to its profits following a primary transfer pricing adjustment in the context of a tax audit of an associated entity taxable in Greece. A relevant tax refund or set-off is only effected on the condition that the associated entity has paid the tax assessed as a result of the primary adjustment.

Payments by local affiliates for management and administrative expenses incurred by a non-local affiliate may be disallowed if:

• they are not in accordance with arm’s-length standards;
• they are not considered to serve the business purposes of the local affiliate; or
• they are not properly documented and recorded in the books reflecting the transactions of the relevant fiscal period.

Payments to persons residing in states deemed as non-co-operative or preferential are not deductible, unless the taxpayer proves that these expenses are incurred for real transactions and do not result in profit-shifting aimed at tax avoidance or evasion.

If the states in question are EU/EEA member states, payments to persons that are resident in such states are deductible in principle. The regimes that are deemed to be non-cooperative or preferential are set annually by means of governmental decision on the basis of criteria set in the law, including (for preferential regimes) the criterion of taxation of profits or gains at a rate that is equal to or less than 60% of the applicable Greek income tax rate for corporations.

There are no constraints relating specifically to related-party borrowing by foreign-owned local affiliates to non-local affiliates, apart from the fact that interest must be in line with the arm’s length standard.

As a general rule, local corporations are taxed on their worldwide income, with the exception of business income attributable to a PE in one of the few jurisdictions that has a double taxation treaty with Greece that provides an exemption method. Any foreign tax paid can be credited against the Greek income tax payable, provided that the foreign tax does not exceed the Greek tax corresponding to such income and the relevant income paid has been properly documented.

There are no local expenses that are treated as non-deductible owing to exemptions on foreign income, in particular. Certain limitations on the deductibility of expenses related to the acquisition of participations (eg, interest on loans used to finance participations) that yield tax-exempt dividends and capital gains income apply equally to foreign and domestic income.

Dividends from foreign subsidiaries are included in the tax basis of local corporations for income tax purposes.

An underlying tax credit in respect of tax paid on the profits from which dividends are derived at the source state is allowed with regard to dividends sourced from countries with which Greece has signed a double taxation treaty that provides for such a credit mechanism (eg, China, Cyprus and the UK).

Inbound dividends received by Greek companies from qualifying EU subsidiaries are exempt from income tax under the same conditions detailed in 4.1 Application of Withholding Taxes (applied in relation to the subsidiaries).

Inbound dividends from qualifying non-EU subsidiaries are exempt from income tax as of the fiscal year 2025 under the following conditions:

• The distributing legal person must be a capital company according to the law of its country of establishment.
• The distributing legal person must not be established in a jurisdiction deemed non-co-operative.
• The distributing legal person must be subject to legal persons’ income tax or other similar tax without the possibility of an option or of being exempt.
• The taxpayer receiving the dividends must hold a participation of at least 10%, based on value or number in the share or equity capital or voting rights of the distributing legal person and such participation is maintained for at least 24 months.

Until completion of the minimum holding period, a bank guarantee of an amount equal to the amount of withholding tax that would otherwise be due can be deployed instead of payment of the withholding tax and a posterior refund claim.

The above-mentioned exemption from Greek income tax on dividends received by Greek companies from qualifying EU and non-EU subsidiaries applies to the extent that such profits are not deductible by the subsidiary. This amendment targets hybrid instruments and is designed to prevent situations of double non-taxation due to mismatches in the tax treatment of profit distribution between the states in which the subsidiary and the parent company are situated. In addition, a special anti-abuse rule prohibits the tax exemption in case of an arrangement or series of arrangements which, having been put into place for the main purpose or one of the main purposes of obtaining a tax advantage that defeats the object or purpose of the applicable tax law, are not genuine having regard to all relevant facts and circumstances.

Gains or royalties derived from the transfer or licensing of an intangible developed by a local corporation to a non-local subsidiary are included in the taxable basis of the local corporation for income tax purposes. Transfers of intangibles between related parties due to business restructuring – whereby intangible assets or a transfer package consisting of functions, assets, risks and business opportunities are being transferred (whether within or outside Greece) – must be made in exchange for arm’s length remuneration, and any gain is taxable.

In addition, subject to specifications set in the law, taxpayers are subject to income tax in Greece on an amount equal to the market value of the assets they transfer, at the time of their exit, minus their value for tax purposes, in any of the following cases:

• transfer of assets from their head office in Greece to their permanent establishment in another state if Greece ceases to have the right to tax the transferred assets, due to the transfer; or
• transfer of assets from their permanent establishment in Greece to their head office or to another permanent establishment in another state if Greece ceases to have the right to tax the transferred assets.

Under Controlled Foreign Corporation (CFC) rules, local corporations can be taxed on the income of their non-local subsidiaries and, where they are not otherwise taxable in Greece or are exempt, of PEs as earned. In accordance with such rules, profits earned by a CFC are added to the taxable profits of the local corporation, under the following conditions:

• In relation to a CFC that is a legal person or entity, the local corporation by itself – or together with its associated enterprises – holds directly or indirectly a participation of more than 50% in the voting rights, or owns directly or indirectly a percentage of more than 50% of the capital, or is entitled to receive more than 50% of the profits of the relevant CFC (legal person or entity).
• The actual corporate tax paid on the CFC’s profits is less than 50% of the corporate tax that would have been charged on such profits in Greece.
• 30% or more of the income before taxes accruing to the CFC falls within the following categories:
1. interest or any other income generated by financial assets;
2. royalties or any other income generated from IP;
3. dividends and income from the disposal of shares;
4. income from financial leasing and income from insurance, banking and other financial activities; and
5. income from companies that undertake invoicing and realise income from sales and services and income from goods and services purchased from and sold to associated enterprises, adding no or little economic value.

CFC rules do not apply to companies or PEs resident in EEA member states, provided that such entities carry out a substantive economic activity supported by staff, equipment, assets and premises, as evidenced by all relevant facts and circumstances. In such cases, the tax authorities bear the burden of proving the absence of a substantive economic activity.

In the case of distribution by a CFC of profits that are included in the taxable basis of the local corporation, any CFC income taxed in a previous fiscal year is deducted from the relevant taxable basis.

There are no uniform local rules related to the substance of non-local affiliates. Guidelines can be found on a case-by-case basis with regard to certain specific anti-avoidance provisions. In addition, national legislation transposing EU Directives must also be interpreted on the basis of the CJEU’s case law. Factors that can be taken into account are local management, physical presence, full-time employees, active VAT number and taxation. Financial statements and information about the business organisation can also be taken into account, along with the other factors.

Gains on the sale by local corporations of shares in non-local affiliates are fully included in the taxable basis for income tax purposes, with the exception of gains on the disposal of shares in qualifying subsidiaries in respect of which legal persons are exempt under certain conditions (see 2.7 Capital Gains).

A general anti-abuse rule exists under Greek legislation as part of the wider measures to combat tax evasion or avoidance. Such rule incorporates part of the EU Anti-tax Avoidance Directive into Greek domestic law.

The rule allows tax authorities – having regard to all relevant facts and circumstances – to ignore an arrangement or a series of arrangements that, having been put in place for the main purpose of obtaining a tax advantage that defeats the object or purpose of the applicable tax law, are not genuine. An arrangement is not considered genuine if it is not put in place for valid commercial reasons that reflect economic reality. In such cases, the tax liability is determined as the tax liability that would arise in the absence of such an arrangement. In accordance with the relevant guidelines, the burden of proof is on the tax authorities. Moreover, no avoidance is considered to exist solely by reason of a taxpayer seeking to reduce its tax burden.

The rule has been relied upon at certain times by the tax authorities to assess taxes, and certain decisions in this respect issued by the Dispute Resolution Directorate of the Independent Authority for Public Revenues can be used for interpretation. No substantial relevant jurisprudence by the Supreme Court exists.

A specific anti-abuse rule applies in respect of tax-neutral corporate reorganisations such as mergers, share-for-share exchanges, spin-offs and demergers. According to this rule, tax benefits are withdrawn in whole or in part where the principal objective (or one of the principal objectives) behind the reorganisation is tax evasion or avoidance.

In addition, a special anti-avoidance rule prohibits exemptions in respect of qualifying dividends paid or received if the exemption is claimed in the context of artificial arrangements that are not put in place for valid commercial reasons reflecting economic reality but, rather, are aimed mainly at obtaining a tax advantage.

Tax authorities can audit the accuracy of tax returns, as well as the general compliance of taxpayers with their tax obligations, on the basis of procedures provided for in the Tax Procedures Code currently in force. The state’s right to assess taxes in addition to those deriving from a taxpayer’s tax return is time-barred, in principle, and lapses after a period of five years from the end of the year in which a tax return is due to be filed (ie, effectively six years after the audited year).

There are a number of derogations from this principle, including cases of tax evasion, cases where the relevant taxpayer has not filed a tax return within the five-year period, and cases where new data or information comes to the attention of the tax authorities that could not reasonably have been known to them within that period. In such circumstances, the period is, in principle, extended to ten years. Also, where the Greek tax authorities have requested information from foreign authorities, the right to assess taxes is time-barred to lapse one year after the receipt of the information.

The Greek tax authorities are obliged to publish annually the number of full and partial tax audits prioritised for the following year on the basis of risk analysis criteria and other available information.

Taxpayers can challenge a tax assessment by filing an out-of-court administrative appeal against such assessment prior to filing a judicial appeal.

Greece has substantially aligned its tax framework with the OECD’s Base Erosion and Profit Shifting (BEPS) project, mainly through the transposition of EU directives (ATAD, DAC), the ratification of the Multilateral Instrument (MLI), and targeted amendments to the Income Tax Code. The reforms collectively reinforce the integrity of the Greek tax system by addressing hybrid mismatches limiting interest deductions, tackling treaty abuse, strengthening transfer pricing rules, and improving transparency and dispute resolution. More specifically:

Transfer Pricing, CbCR, and Transparency (Law 4484/2017) implemented BEPS Action 13, introducing:

• country-by-country reporting for MNE groups with consolidated turnover of ≥ EUR750M;
• master file and local file documentation aligned with OECD standards; and
• automatic exchange of CbCR information.

Additionally, Law 4557/2018 established the Ultimate Beneficial Owner Register, significantly enhancing transparency across corporate structures.

Anti-Avoidance Rules (ATAD I and II)

Transposed primarily through Law 4607/2019 and Law 4714/2020, these cover:

• the interest limitation rule (BEPS Action 4) – deduction of exceeding borrowing costs capped at 30% of EBITDA with EUR3 million safe harbour;
• CFC rules (Action 3) – inclusion of passive income of low-taxed foreign subsidiaries;
• exit taxation – gain realisation on asset/migration transfers; installment option within EU/EEA; and
• hybrid mismatch rules (ATAD II; Action 2) – neutralisation of deduction/no inclusion, double deductions, and imported mismatches.

Treaty Abuse Prevention and MLI Ratification

With Law 4714/2020, Greece ratified the OECD Multilateral Instrument (MLI), implementing:

• the Principal Purpose Test (PPT) for treaty benefits;
• updated preamble clauses targeting avoidance;
• improved tie-breaker rules for dual-resident entities; and
• a strengthened Mutual Agreement Procedure (BEPS Action 14).

General Anti-Avoidance Rule (GAAR)

The GAAR under Law 4172/2013 incorporates BEPS Action 6 concepts, allowing tax authorities to disregard arrangements lacking economic substance and preventing artificial use of treaties.

Mandatory Disclosure Rules (DAC6)

By virtue of Law 4714/2020, Greece transposed into its domestic legislation, Council Directive (EU) 2018/822 adopted on 25 May 2018 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC 6).

Alignment of Preferential Regimes and Harmful Tax Practices

Amendments to domestic legislation modernised Greece’s preferential tax regimes in line with BEPS Action 5 and EU State aid rules, affecting the tonnage tax system, IP regimes, and investment incentive frameworks.

Greece is a member of the Inclusive Framework on Base Erosion and Profit Shifting and views BEPS not only as a compliance requirement but also as a strategic tool to strengthen the tax system, improve fiscal stability and battle tax evasion and avoidance.

Law 5100/2024 transposed into Greek legislation the EU Council Directive 2022/2523 on establishing a global minimum level of taxation for multinational enterprise groups and large‑scale domestic groups within the European Union (Pillar Two).

The Law closely follows the EU Directive by introducing two interlocked rules, the income inclusion rule (IIR) and the undertaxed profit rule (UTPR) designed to bring the effective tax rate of in-scope groups up to the agreed minimum effective tax rate of 15% through a top-up tax. Greece also adopts a domestic top-up tax so that it can collect taxes on low-taxed entities operating within its territory.

As regards Pillar 1, it is not currently anticipated to be enacted in Greece until the OECD’s Multilateral Convention (MLC) is finalised, signed, and entered into force globally. The allocation of taxing rights for MNEs to end-market and source jurisdictions if this progresses, may have a positive impact on fiscal revenues in Greece going forward.

International tax has a high public profile in Greece, most notably with regard to transfer pricing and the general objective of transparency. In general, Greece tends to adopt BEPS recommendations fully and conservatively. At the same time, however, Greece’s focus is on protecting the tax base, ensuring transparency, and demonstrating a fair and modern tax system.

Greece implements BEPS measures, prioritising transparency, fairness, and protection of the tax base. Maintaining competitiveness is expected to rely on non‑BEPS‑sensitive incentives, such as investment credits, employment subsidies, R&D deductions, accelerated depreciation, participation exemptions and sector‑specific regimes explicitly permitted under EU rules, as further outlined in the above sections. These measures would support economic growth without undermining minimum taxation or anti‑avoidance standards.

In principle, Greece’s competitive tax offerings are increasingly shaped – and limited – by BEPS measures and EU State aid rules, as transposed into domestic legislation. The areas most exposed to challenge are those that could be viewed as offering a selective advantage, encouraging profit shifting, or undermining minimum taxation standards. Special regimes that offer reduced effective tax rates or exemptions – such as incentives for holding companies, shipping‑related entities (outside the EU‑approved tonnage tax), or sector‑specific corporate tax reductions – are more vulnerable to challenge.

In general, Greece’s competitive strategy increasingly focuses on broad, non-selective incentives (eg, investment deductions, R&D support) and on maintaining a stable, transparent tax environment rather than offering low rate or preferential tax regimes.

Applicable as of 1 January 2020, hybrid mismatch rules were transposed into domestic legislation. The relevant provisions introduce an obligation to disallow a deduction, include income or limit tax relief, in order to address situations of:

• mismatches arising from conflict in the characterisation of financial instruments, payments and entities, or from the allocation of payments; and
• hybrid transfers, imported mismatches and other cases of mismatches with double deduction outcomes, including cases involving dual tax residency.

Greece does not apply a territorial tax regime, instead local tax residents are taxed on their worldwide income. See 6.1. Foreign Income Exemptions for further details.

For further details on interest deductibility rules of the domestic legislation, see 2.5 Deduction of Interest.

Greece does not apply a territorial tax regime. For further details on local CFC rules, see 6.5 Controlled Foreign Corporation-Type Rules.

The application of Greece’s general anti‑abuse rule (GAAR), special anti-abuse rule regarding dividends that are exempt from tax and the principal purpose test (PPT) as implemented by virtue of the ratification of the Multilateral Instrument (MLI) to DTCs to disregard arrangements lacking commercial substance could have an impact on both inbound and outbound investors. For further details, see 7. Anti-Avoidance Provisions and 9.1 Adoption of BEPS Recommendations.

Prior to BEPS, the applicable legal framework for transfer pricing in Greece fully endorsed the arm’s length principle as defined in Article 9 of the OECD Model Tax Convention and interpreted by the OECD Transfer Pricing Guidelines. BEPS-driven transfer pricing reforms in Greece have shifted the focus even more firmly toward substance, value creation, and DEMPE functions, leading to stricter documentation requirements and more intensive audits. Greek tax authorities increasingly challenge low substance foreign IP entities and scrutinise outbound royalty payments. Please see 4.4 Transfer Pricing Issues for Inbound Investors for further details.

Pursuant to L. 4484/2017, Greece transposed EU Directive (EU) 2016/881, introducing the automatic exchange of country-by-country (CbC) reports within the EU, into its domestic legislation. Multinational groups with total annual consolidated revenues exceeding EUR750 million are required to submit a CbC report on an annual basis, providing tax authorities with information on revenue, profit before income tax, income tax paid and other details regarding the allocation of the group’s profits in different jurisdictions. The CbC report also provides information on which group entity is operating in a particular tax jurisdiction and the business activities in which each entity is engaged.

Also, by virtue of Law 4714/2020, Greece transposed into its domestic legislation Council Directive (EU) 2018/822, adopted on 25 May 2018, amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (DAC 6).

Greece has not adopted a unilateral digital services tax, nor is any such measure currently under consideration. Instead, Greece follows the EU (as it is obliged) and OECD policy framework, under which the taxation of foreign digital businesses is primarily shaped by BEPS actions and OECD proposals for taxing the digitalised economy. These initiatives aim to align taxation with genuine economic activity and value creation – most notably by preventing the artificial avoidance of permanent establishment status and by ensuring that transfer pricing outcomes reflect the economic substance and value generated within each jurisdiction.

However, with respect to the concept of “permanent establishment” in the context of e‑commerce transactions, Greece does not adhere to all interpretations on the OECD Model Convention provisions on electronic commerce, particularly regarding whether the mere use of computer equipment in a country for carrying out electronic commerce operations may constitute a permanent establishment.

Finally, it is to be noted that Greece introduced a legal framework at the local level regarding the taxation of short-term rentals in the sharing economy through digital platforms. Greece also transposed Directive 2021/514/EU amending Directive 2011/16/EU on administrative co-operation in the field of taxation, towards imposing reporting obligations on digital platform operators with the aim of enabling tax administrations to assess and control gross income earned from commercial activities performed with the intermediation of digital platforms.

See 9.12 Digital Economy Businesses.

Greece imposes a 20% withholding tax on royalties paid to offshore owners in exchange for the use of IP. Rates can be reduced or eliminated if payments are made to beneficiaries in income tax treaty jurisdictions. Moreover, payments to persons residing in states deemed as non-cooperative or preferential are not deductible, unless the taxpayer proves that these expenses are incurred for real transactions and do not result in profit shifting aimed at tax avoidance or evasion.