The Law 4484/2017 entitled “Adaptation of Greek Legislation to the provisions of Directive (EU) 2016/881 and other provisions” was published in the Government Gazette on August 1, 2017. It harmonizes Greek legislation with the provisions of Council Directive (EU) 2016/881 of May 25, 2016 on the mandatory automatic exchange of information in the field of taxation and modifies the Greek Corporate Income Tax L.4170/2013 and 4474/2017 with respect to Country-by-Country (CbC) reporting. The House of Representatives of the Ministry of Finance on “Law 4484/2017” was voted on by the Plenary Assembly on July 28, 2017. The Greek Parliament introduced this draft Law 4484/2017 on July 20, 2017.
The draft bill implementing EU Council Directives 2016/881 regarding mandatory automatic exchange of tax related information (EU CbC reporting) was submitted to the Greek parliament on July 21, 2017.
The Parliament of Greece introduced a draft Law 4484/2017 on July 20, 2017 that amends to the Corporate Income Tax Law L.4170 / 2013 and 4474/2017. The suggested amendments contain additional transfer pricing documentation requirements corresponding to the European Union (EU) Guidance 2016/881. In accordance with the draft law, the country-by-country (CbC) reporting will be applicable for business years beginning on or after January 1, 2016.
Greek tax resident entities those are members of a multinational enterprise (MNE) group, with a consolidated group turnover more than Euro 750 mil in the fiscal year previous the fiscal year to which the CbC report applies will have to file the report. The draft law requires that the reporting entity notification is made for domestic subsidiaries and permanent establishments of non-EU MNEs to the Greek tax authorities by December 31, 2017 (for those entities whose fiscal year ended December 31, 2016). The report is required to be provided to the tax authorities within 15 months after the last day of the tax year it refers to. However, the first CbC report will need to be submitted by June 30, 2018 for MNEs with a fiscal year ended on 31 December 2016. Also, CbC report should be prepared in Greek or any other official language of the EU. The report has to cover group revenue, earnings before income tax, income tax paid, Income tax accrued, Shared Capital, Accumulated earnings.
Failure to submit accurate CbC report is sanctioned with monetary penalty (apart from the consequence of the unfavorable risk assessment increasing the probability of a full scope tax audit). The penalty amounts Euro 10,000 is charged in case of non-filing and Euro 5,000 is imposed on late or inaccurate filing.
The Finance Ministry has announced a decision relating to the extension of the tax return submission deadline. Under Article 3 of law no. 4172/2013, the deadline for submission of individual and company income tax returns is to be extended until July 17, 2017.
Following the extension of the deadline for submission of the corporate income tax declaration until July 7, 2017, the imminent deposit arrangement will ensure maintenance of the provision for tax payment in 6 installments. The first installment will be paid on July 31, 2017 and the remaining five will be due by the last working day of each of the five following months, which may not extend beyond the same tax year.
The Financial Secretary, Katerina Papanatsiou, signed and made a decision to extend the deadlines for submission of tax returns and payment of taxes, levies, fees and the extension and suspension of payment confirmed debt due to strong earthquakes occurred in Lesvos on 12/06/2017.
The deadline for payment of withholding income tax, inheritance tax, gifts, parental benefits and real estate transfer, stamp duty and other taxes (other than VAT laid down by special decision of the Principle of authorization Governor) is to be extended until 29th of September 2017. This deadline applies for both individual and legal entities.
Another deadline is set on 12th of December 2017 for payment of the amounts established in the tax / auditing debts Centers of individuals and legal persons and entities whose principal residence or principal place (seat) in the municipal units of the Municipality of Lesvos North Aegean Region.
The Deputy Finance Minister, Katerina Papanatsiou, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (“Multilateral Instrument” or “MLI”). More than 76 other countries and territories, Greece signed the Convention on 7th of June 2017 at Paris.
The Convention is a key outcome of the OECD/G20 Base Erosion and Profit Shifting (BEPS) project, which aims to offers concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide.
The convention contributes in reducing by multinational companies and avoiding double taxation, while creating a more stable and well-functioning global tax system. The Convention enables all signatories, inter alia, to meet treaty-related minimum standards that were agreed as part of the Final BEPS package, including the minimum standard for the prevention of treaty abuse under Action 6.
The effective date for MLI depends on the timing of domestic ratification process. The Convention will enter into force after signatories have completed their domestic requirements and deposited their instruments of ratification with the OECD.
The Government published Law 4472 on 19th of May 2017 in the Official Gazette. It includes several reform measures concerning the medium-term fiscal targets for 2018-2021 and tax cuts for legal entities. Therefore, the corporate income tax (CIT) rate will be reduced from twenty nine per cent (29%) to twenty six per cent (26%) from 1 January 2019 subject to certain conditions. The corporate rate for credit institutions is remain twenty nine per cent (29%) rate. There are some changes to the individual income tax brackets and special solidarity tax brackets. The changes on individual income tax brackets and special solidarity tax brackets are given below:
Individual income tax brackets:
|Less than or equal to EUR 20,000||20%|
|Over EUR 20,000 up to 30,000||29%|
|Over EUR 30,000 up to 40,000||37%|
|Over EUR 40,000||45%|
Special solidarity tax brackets:
|Up to EUR 30,000||0%|
|More than EUR 30,000 up to 40,000||2%|
|Over EUR 40,000 up to 65,000||5%|
|Over EUR 65,000 up to 220,000||9%|
|More than EUR 220,000||10%|
From 1st January 2020, the personal income tax and special solidarity tax amendments will be applied. The law also gives other measures regarding public pension, social security, employment law, and others.