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Clarifications Regarding Taxation of Inbound Dividends

The Ministry of Finance has clarified its ruling on exemption of corporate income tax for Greek Soci?t?s Anonymes (AEs) and limited liability companies (EPEs) on profits distributed by entities, situated in EU member states, provided that the requirements of the Parent-Subsidiary Directive are met. Taxand Greece looks at the clarifications.

Exemption is to be granted on condition that these profits are recorded in a tax-free reserve account wherein the net amount of profits, (ie after the deduction of any tax withheld abroad), is recorded. The above reserve is subject to 25 percent withholding tax in case of distribution or capitalisation, with no possibility of such tax to be set off with any tax withheld or paid abroad. Given that the tax operates as a withholding tax, shareholders shall be eligible to claim protection therefrom under the provision of relevant Double Tax Conventions or the EU Parent Subsidiary Directive as the case may be.

Taxand's Take

The provision is applicable for dividends collected from 31 March 2011 onwards, as per the clarifications of the relevant interpretative Ministerial Decision.

Your Taxand contact for further queries is:
Yerassimos C. Yannopoulos
T. +30 210 6967066

Taxand's Take Author