On 23 February 2022, the Greek Public Revenue Authority (AADE) published Circular E. 2018 of 23 February 2022, providing guidance on the application of Controlled Foreign Companies (CFC rules). This is introduced as from 1 January 2019 in line with the EU Anti-Tax Avoidance Directive and BEPS Action 3. The Circular covers following things:

  • Providing guidelines on the tax treatment of income deriving from CFCs and the process that should be adopted for its assessment.
  • Definition of a CFC, including the participation requirement.
  • Definition of related companies.
  • Income categories and calculation methods to determine taxable income under the CFC regime.
  •  Distribution of profits by the CFC and sale of participation in the CFC.
  • Individual’s tax return.
  • the exemption from the CFC rules where a CFC carries on a substantial economic activity supported by staff, equipment, assets, and premises, as evidenced by relevant facts and circumstances.