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Latest developments in Greek tax legislation
2014 has seen various updates to Greek tax legislation. Taxand Greece provides an overview of the recent developments.
Disposal of real estate assets – guidelines for application of 15% tax
Law 4254/2014 provides guidelines on how to determine the cost and year of acquisition of real estate property in order to define the taxable capital gain arising from the disposal of such property. The acquisition cost is determined based on the legal ground of acquisition (e.g. purchase, gift, inheritance, development etc.). In the absence of other information the acquisition cost is determined by reference to statistical data issued by the Bank of Greece annually. The acquisition year is the year within which 75% of the property rights have been acquired. In the event that there is no available proof of the acquisition year such year is determined either in the law or by means of ministerial decisions that will be issued based on authorisation granted in the law. Also, changes are introduced in de-inflation rates applicable on the acquisition cost or capital gain calculation purposes.
Exclusion of domestic royalty payments from 20% withholding tax
According to Law 4172/2014 royalty payments including those paid domestically are subject to 20% withholding tax in Greece. Under the new law 4254/2014 royalties paid to Greek tax resident legal entities or foreign legal entities with a permanent establishment in Greece are not subject to such withholding tax.
Set up of new companies exempt from capital accumulation tax
According to Law 4254/2014 and Ministerial Decision POL 1133/2014 capital accumulation tax is no longer applicable on the share capital contributed into newly established legal entities. The Ministerial decision confirms that abolishment of capital accumulation tax does not trigger stamp tax liabilities on the share capital contributed in the new company. The exemption applies from 7 April 2014.
Also published in Thomson Reuters' Taxnet Pro, 28 May 2014