Greece: New Transfer Pricing Documentation Rules

17 February, 2013

The Greek Parliament passed Income Tax amendments in January 2013 which changes to the transfer pricing provisions have been included.

In Greece’s income tax law Article 39 and 39A have been repealed by new measures. According to the amendments Greek companies will have to report and document all inter-company transactions including cross-border transactions. Transfer pricing documentation will have to be submitted within 30 days of a request from the tax authorities.

The transfer pricing rules are now apply to all inter-company transactions, not only with respect to the sale of goods and the provision of services, but also with respect to loan agreements and transfers of shares, partnerships, and real estate. All transactions will now have to be documented.

The threshold for documentation of the transactions has been amended. According to the new rule if the inter-company transactions with one or more associated enterprises do not exceed EUR 100,000 in total (and gross incomes of the financial year of all related enterprises does not go above EUR 5,000,000), they will be exempted from the documentation obligation. They will also be exempted from the documentation obligation if the transactions with one or more associated enterprises do not exceed EUR 200,000 and the gross revenues of the financial year for all associated enterprises exceed EUR 5,000,000.

The provisions of Law 2523/1997 are amended initiating new penalties which will be payable within 1 month following their assessment. In case an appeal is submitted and the assessment is not suspended:

a penalty of EUR 1,000 to 10,000 estimated at a rate of 1% on the enterprise’s recorded gross profits will be imposed for late submission of the “Summary Information Sheet” and for late submission of the “Transfer Pricing Documentation File” to the competent audit authority within the 30 days deadline,
a penalty of EUR 10,000 to 100,000 estimated at a rate of 1% on the enterprise’s recorded gross profits is imposed in case the “Summary Information Sheet” otherwise the “Transfer Pricing Documentation File” is not submitted to the competent audit authority.

If the enterprise does not abide by the arm’s length principle, the 20% penalty enforced on the net additional profits has been abolished and instead the provisions of Law 2523/1997 will be applied.