Business Operations in Greece (Portfolio 7142)

Tax Management Portfolio, Business Operations in Greece, No. 7142, contains an overview of the general business and investment environment in Greece, which is changing as a result of a period of economic and social reform intended to create an investor friendly business context and enhance Greece's international orientation and overall competitiveness. To view this Portfolio, visit Bloomberg Tax for a free trial.

Bloomberg Tax

This Portfolio is available with a subscription to Bloomberg Tax, a comprehensive research solution including over 500 Tax Management Portfolios™, practice tools, primary sources and timely news.

Description

Tax Management Portfolio, Business Operations in Greece, No. 7142, contains an overview of the general business and investment environment in Greece, which is changing as a result of a period of economic and social reform intended to create an investor friendly business context and enhance Greece's international orientation and overall competitiveness.

The Portfolio analyzes in detail Greece's taxation regime as it applies to both resident and nonresident individuals and legal entities. It also covers the general aspects of corporate law, intellectual property law, labor law and investment law, etc. relevant to foreign investors and their advisors.

Along with a table listing the double taxation treaties and protocols signed by Greece, the Worksheets include tax forms applicable to legal entities, as well as Model Articles of Association for the main types of business entity.

This Portfolio may be cited as Kostakopoulos, 7142 T.M., Business Operations in Greece.

Authors

Nikos Korogiannakis

Bachelor of Laws, National and Kapodistrian University of Athens, 1989; LL.M. in European Law, Université Libre de Bruxelles, 1993; Parliamentary Assistant in the European Parliament 1991-1994; member of the Athens, Brussels and Luxembourg Bar Associations; joined G.S. Kostakopoulos & Associates Law Firm in 1994; managing partner of the Brussels office.

Maria Milathianaki

Bachelor of Laws, National and Kapodistrian University of Athens, 2004; LL.M. in German Law, Ludwig–Maximilians University, Munich, 2006; admitted to Athens Bar Association, 2006; joined G.S. Kostakopoulos & Associates Law Firm in 2009; Ph.D. in Company Law, Faculty of Law, National and Kapodistrian University of Athens, 2012.

Ekaterini Mouzaki

Bachelor of Laws, University of Lille II, 1997; LL.M. in Political Science, University of Lille II, 1998; LL.M. in European Defense and Security, University of Lille II, 1999; admitted to Athens Bar Association, 2000; joined G.S. Kostakopoulos & Associates Law Firm in 1999, becoming a Partner in 2005.



Maria Siouti

Bachelor of Laws, National and Kapodistrian University of Athens, 2008; admitted to Athens Bar Association, 2010; joined G.S. Kostakopoulos & Associates Law Firm in 2011; LL.M. in Public Law, Faculty of Law, National and Kapodistrian University of Athens 2015.

Marina Stavropoulou

Bachelor of Laws, Democritus University of Thrace, 1991; LL.M. in European Law, Universite Libre de Bruxelles, Insitut d' Etudes Europeennes, 1993; admitted to Athens Bar Association, 1992. Ms. Stavropoulou began her professional career with an internship (stage) in the European Commission in Brussels. She served as Director of the Directorate of Legal Services of the Hellenic Competition Commission until 2006; since then she has provided legal services at the Office of Legal Support of the Hellenic Competition Commission, being responsible for litigating before the Athens Administrative Court of Appeal and the Council of State. She has worked in law firms specializing in business law and competition law and now has her own practice. She is of Counsel to G.S. Kostakopoulos & Associates Law Firm.

Nikolaos Theodorou

Bachelor of Laws, National and Kapodistrian University of Athens, 2007; LL.M. (Eur.) in European and International Commercial Law, Ludwig–Maximilians University, Munich, 2008; Ph.D. in EU Law and Public Law, Ludwig–Maximilians University, Munich, 2016; admitted to Kalamata Bar Association, 2009. He has worked for the European Commission in Luxembourg (2010), Martens Law Firm in Munich (2011-2012), and the Hellenic Ministry of National Defence in Athens (2013). He joined G.S. Kostakopoulos & Associates Law Firm in 2014. He has been a Scholar of the European Union and the Greek State Scholarships Foundation (IKY).

Vrasidas Damilakos

B.Sc. in Economics. University of Macedonia, in Thessaloniki, 1994; M.A. in Accounting & Finance, Lancaster University, 1995; licensed certified public accountant since 2006; Equity Partner and the Managing Partner (MP) of Delta Partners Certified Public Accountants S.A., which is the Geneva Group International member firm in Greece since 2011. In addition, he is an elected Member of the Assembly of Representatives of the Greek Economic Chamber. External counsel to G.S. Kostakopoulos & Associates Law Firm.

Table of Contents

Detailed Analysis
I. Greece — The Country, the People and the Economy
A. The Country
B. The People
C. The Economy
1. General
2. Political Organization
3. Foreign Relations
II. Operating a Business in Greece
A. Foreign Investment Regulation
1. Opportunities
a. Labor Regulation
b. Privatizations
c. Real Estate
2. Incentives
a. The Current Investment Law
b. Investment Incentives
c. Strategic Investments
d. Special Conditions for Residence Permits
3. Restrictions
a. Taxation
b. Banking System
c. Acquisition of Land in Border Areas and Private Islands
B. Currency and Exchange Controls
1. Currency
2. Exchange Regulations
C. Trade and Commerce Regulations
1. Imports and Exports
a. Licenses and Quotas
b. Custom Duties and Other Taxes
c. Documentation
2. General Legal Framework for Business
a. Monopolies — Concerted Practices — Abuse of Dominant Position
b. Mergers
c. Price Controls
d. Securities Regulations
3. Protection of Intellectual Property
a. Patents, Patents of Addition and Utility Model Certificates
b. Industrial Designs and Models
c. Trademarks
d. Industrial Know-How
e. Copyright and Related Rights
D. Immigration
1. European Union Nationals
2. Non-European Union Nationals
3. Work Permits
E. Labor and Social Security
1. General Aspects
a. Social Context
b. Labor Regulations
2. Employment Contracts
3. Working Conditions
a. Working Hours
b. Remuneration
c. Legal Holidays
d. Managerial Staff
F. Business Financing
1. Credit Institutions
2. Autonomous Institutions and Public Involvement
III. Forms of Doing Business in Greece
A. Principal Business Entities
1. Sole Proprietorship
2. Limited Liability Company
3. Partnership
4. Branch of a Foreign Corporation
5. Other Entities
B. Public Limited Liability Company or Company Limited by Shares (Anonymi Etairia)
1. Formation
a. Object Clause
b. Company Name
c. Shareholders
d. Deed of Incorporation
e. Share Capital
f. Incorporation Procedure
g. Cost of Incorporation
2. Operation
a. License
b. Amendment of Articles
c. Increase and Decrease of Share Capital
d. Acquisition of Own Shares
e. General Meeting of Shareholders
f. Board of Directors
g. Auditors
h. Books and Records
i. Financial Statements
j. Dividends and Other Distribution of Profits
k. Reserves
3. Reorganizations
4. Dissolution and Liquidation
C. Limited Liability Company (Etairia Periorismenis Eythinis)
1. General
2. Company Bodies
3. Amendment of Articles
4. Special Rules
D. Private Capital Company or Private Company (Idiotiki Kefalaiouchiki Etairia)
1. General
2. Company Bodies
3. Other Statutory Provisions
E. Partnerships
1. General Partnership (Omorrythmi Etairia)
2. Limited Partnership (Eterrorythmi Etairia)
3. Partnership Limited by Shares (Eterrorythmi Kata Metoches Etairia)
F. Branch of a Foreign Corporation
G. Other Entities
1. Civil Company (Astiki Etairia)
2. Silent Partnership (Aphanes Etairia)
3. Joint Venture (Koinopraxia)
4. European Company (Societas Europaea)
5. European Economic Interest Grouping
H. Special Purpose Companies
1. Cooperative (Synetairismos)
2. Maritime Company (Naytiki Etairia)
3. Company Limited by Shares for Investments in Real Property (Anonymi Etairia Ependyseon se Akiniti Periousia)
4. Insurance Company
5. Investment Services Company Limited by Shares
6. Investment Portfolio Company Limited by Shares
IV. Principal Taxes
A. Sources of Authority with Respect to Taxation
1. Legislative
a. Organization of the Tax Law
b. Other Legislative Instruments that Can Be Used to Interpret the Law
c. Legislative Process
2. Administrative Bodies
3. Courts
a. Quasi-Judicial Administrative Appeal (Endikofanis Prosfygi)
b. Petition Before Administrative Courts
c. Appeal Against a Decision of the Court of First Instance
d. Petition for Reversal Before the Council of State
B. Income Tax
C. Value Added Tax
1. Exemptions from Value Added Tax
2. Tax Rates
3. Special Value Added Tax Schemes
4. Value Added Tax Returns and Payments
D. Real Property Taxation
1. Unified Real Estate Ownership Tax
2. Real Estate Duty
3. Special Tax on Real Property of Companies
E. Taxes and Fees Applicable to Real Estate Transfers
F. Payroll Tax
1. Collection of Income Tax on Salaries and Pensions
2. Social Security Contributions
G. Other
1. Stamp Duty
2. Taxation of Passenger Cars
a. Registration Fee
b. Circulation Tax
c. Luxury Tax
d. Municipal Taxes
3. Entrepreneur's Duty
V. Taxation of Domestic Corporations
A. What Is a Domestic Corporation?
B. Corporate Income Tax (Legal Persons and Legal Entities)
1. Taxation of Worldwide Income
2. Accounting
a. General
b. Accounting Periods
c. Accounting Methods
d. Inventories
e. Reserves
3. Calculation of Gross Income
a. General
b. Capital Gains
c. Dividend Income
d. Income from Foreign Sources
e. Stock Options
f. Other Inclusions in Gross Income
g. Exclusions from Gross Income
4. Business Expenses
a. General
b. Organizational Expenses
c. Travel and Entertainment Expenses
d. Interest and Royalties
e. Taxes
f. Depreciation and Amortization
g. Obsolete Equipment
h. Charitable Contributions
i. Capital Losses
j. Casualty Losses
k. Reserve Accounts
l. Bad Debts
m. Inventory Write-Downs
n. Rent
o. Salaries and Wages
p. Other Deductions from Gross Income
q. Nondeductible Expenses
5. Capital Expenditure
6. Loss Carryovers and Carrybacks
7. Tax Credits
a. Foreign Tax Credit
b. Investment Tax Credit
c. Other Credits
8. Tax Rates and Calculation of Taxable Income
9. Assessment and Filing
10. Audit Process and Statute of Limitations for Assessment and Collection of Taxes
11. Consolidated Returns
12. Reorganizations
a. Changes of Legal Form
b. Mergers, Spin-offs, etc.
c. Transfer Pricing
d. Liquidation
13. Advance Rulings
C. Other Taxes
1. Dividend Tax
2. Capital Contribution Duty
3. Value Added Tax
4. Trade Tax
5. Local Taxes
6. Other Taxes
VI. Taxation of Foreign Corporations
A. What Is a Foreign Corporation?
B. Determination of Taxable Income
C. Method of Taxation
1. Passive Investment Income
2. Business Income
D. Assessment and Filing
VII. Taxation of a Branch
A. Determination of Taxable Income
B. Method of Taxation
C. Subsidiary vs. Branch
VIII. Taxation of Partnerships
IX. Taxation of Other Business Entities
X. Taxation of Resident Individuals
Introductory Material
A. Scope of Taxation
B. Residence
C. Determination of Taxable Income
1. Income from Employment and Pensions
a. Definition
b. Benefits in Kind
2. Income from Business Activities
3. Income from Capital
a. Dividends
b. Interest
c. Royalties
d. Income from Real Property
4. Capital Gains
a. Transfer of Real Property (Currently Suspended)
b. Transfer of Securities
D. Allowances, Deductions and Credits
1. Foreign Tax Credit
2. Exemptions and Credits Related to Income from Employment and Pensions
a. Deductions from Taxable Income of an Employee
b. Exemptions
c. Tax Credits
(1) General Tax Credit
(2) Additional Tax Credits
(3) Special Tax Credits
3. Income from Business Activities
a. Deductible Expenses
b. Nondeductible Expenses
c. Depreciation
d. Valuation of Inventory
e. Bad Debts
f. Set-off of Losses
4. Income from Capital
a. Interest Income
b. Income from Real Property
5. Capital Gains
E. Tax Rates and Calculation of Taxable Income
1. Income Tax Rates
a. Income from Employment and Pensions
b. Income from Business Activities
c. Income from Capital
d. Capital Gains
2. Withholding Tax
3. Alternative Minimum Tax Calculation
4. Income from Noncooperative States and States with Preferential Tax Regimes
F. Assessment and Filing
1. Tax Return and Assessment Formalities
2. Payment of Tax
3. Advance Tax Payment
4. Penalties
XI. Taxation of Nonresident Individuals
A. Scope of Taxation
B. Residence
C. Determination of Taxable Income
1. Income from Employment and Pensions
2. Income from Business Activities
3. Income from Capital
4. Capital Gains
D. Tax Rates and Calculation of Taxable Income
1. Income Tax Rates
2. Withholding Tax
3. Calculation of Alternative Minimum Taxation
E. Assessment and Filing
XII. Inheritance, Gift and Parental Grant Taxation
A. Inheritance Tax
1. Liable Persons
2. Procedure and Deadlines
3. Categories of Heirs
4. Tax Rates
B. Gift Tax
1. Taxable Transactions
2. Liable Persons
3. Tax Rates
4. Cash Gifts
5. Exempt Transfers
C. Taxation of Parental Grants
1. Taxable Transactions
2. Taxable Base
3. Liable Persons
4. Transfer Exception
5. Cash Parental Grants
XIII. Intercompany Pricing
A. Adjustment of Intercompany Prices
1. Scope of the Provision
2. Determination of Arm's-Length Price
3. Documentation Requirements
4. Availability of Advance Pricing Agreements or Rulings on Pricing
B. Thin Capitalization Rules
XIV. Special Provisions Relating to Multinational Corporations
A. Foreign Family Foundations
B. Tax Haven Operations
C. Controlled Foreign Corporation Provisions
XV. Avoidance of Double Taxation
A. Foreign Tax Credit
B. Tax Treaties
1. Tax Treaty Negotiation and Ratification Process
2. Procedure for Claiming Reduced or Zero Withholding Tax, or a Refund of Withholding Tax
3. Taxation of Business Income
a. Permanent Establishment
b. Industrial or Commercial Profits
4. Taxation of Investment Income
a. What Is Investment Income?
b. Withholding Rates
C. Tax Treaties with the United States
1. Income Tax Treaty
a. Taxes Covered
b. Permanent Establishment
c. Interest
d. Royalties
e. Income from Real Property and Natural Resources
f. Personal Services
g. Government Employees; Pensions and Annuities
h. Students and Apprentices
i. Foreign Tax Credit
j. Exchange of Information
2. Estate/Inheritance Tax Treaty
3. Intergovernmental Agreement Between the United States and Greece Pursuant to the Foreign Account Tax Compliance Act
4. Other

Working Papers

Table of Worksheets
Worksheet 1 Model Articles of Association of a Company Limited by Shares (Société Anonyme)
Worksheet 2 Model Articles of Association of a Limited Liability Company
Worksheet 3 Model Articles of Association of a Private Capital Company
Worksheet 4 Model Articles of Association of a General Partnership
Worksheet 5 Model Articles of Association of a Limited Partnership
Worksheet 6 Declaration for Issuing VAT Number/Commencement of Activity for E.U. Taxable Persons Without Establishment in Greece
Worksheet 7 Gifts/Parental Grants Tax Return
Worksheet 8 Inheritance Tax Return
Worksheet 9 1950 Convention Between Greece and United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
Worksheet 10 1953 Convention Between Greece and United Kingdom and North Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income
Worksheet 11 Claim for the Application of the Double Taxation Convention Between Greece and the United States
Worksheet 12 Claim for the Application of the Double Taxation Convention Between Greece and the United Kingdom
Worksheet 13 Annual Claim for Refund of Income Tax
Worksheet 14 Data from Business Activity
Worksheet 15 Descriptive List of Rent
Worksheet 16 List of Countries with Which Greece Has In Force Income Tax Treaties and Other Tax-Related Agreements as of March 1, 2018