In a case handled by our tax litigation team, concerning the stamp duty treatment of current accounts, the Dispute Resolution Committee has just issued its decision ruling that stamp duty should not be applied. More specifically the current account concerned was related to the payment by an EU group company on behalf of the group’s Greek subsidiary of the latter’s obligations towards its suppliers, where such payments were treated as granting of credit. At the same time the Greek subsidiary was transferring its cash surplus to the aforementioned group company (zero balancing) which was also treated as granting of credit. To be noted interest was calculated and applied on the current account’s balance.
In this respect, the Dispute Resolution Committee, accepting our relevant argumentation, ruled that the above transactions, constituting granting of credit, fall within the scope of VAT and therefore cannot be subject to stamp duty, as per the applicable Greek VAT legislation, which excludes from stamp duty the transactions that fall within the scope of VAT.
The decision of the Dispute Resolution Committee is significant, as it clarifies the indirect tax treatment of zero balancing structures, as well as inter-company structures where a group company undertakes payments on behalf of the group’s subsidiaries. It also allows companies to claim back any stamp duty paid on such structures.
Our team was led by Alex Karopoulos, partner and Diana Tsourapa, senior associate.