Security Alert

A number of changes have been introduced by virtue of the new tax law ratified a few days ago by the Greek parliament, impacting tax aspects of cross-border activities. Changes include:
Greece transposes the rules of the EU Anti-Tax Avoidance Directive_Volume 2
By virtue of articles 48 et seq. of the recent tax law, Greece transposed a set of rules provided under the EU Anti-Tax Avoidance Directive (“ATAD”) in relation to exit taxation (art. 5 ATAD) and hybrid mismatches (art. 9 and 9B ATAD). The rules on hybrid mismatches have been transposed as per the amendments introduced by Directive (EU) 2017/952 (“ATAD 2”) regarding hybrid mismatches with third countries.
This is the second set of ATAD rules that are being transposed into national legislation, following the transposition of the first set in April 2019, including the interest barrier rule (currently set out in art. 49 ITC), the controlled foreign corporation rule (currently set out in art. 66 ITC), and the general anti-avoidance rule (currently set out in art. 38 Law 4174/2013).
The transposition of these rules comes after the launch of an infringement procedure by the European Commission in relation to Greece’s failure to implement the Directive by 31 December 2019.
Contrary to the first set of rules, the rules concerning exit taxation and hybrid mismatches apply exclusively to corporate taxpayers and not to individuals.
I. Exit Taxation Rule
II. Hybrid Mismatches Rules (Art. 66 B ITC)
Advance Pricing Arrangements; Roll back effect & other amendments
Greece introduced amendments to the legislative framework provided for advance pricing arrangement (“APA”) programs, in order to, inter alia, meet the BEPS Action 14 Minimum Standard concerning the prevention of disputes. Following the relevant recommendation set out in the MAP Peer Review Report (Stage 1), Greece now provides for the roll-back of bilateral or multilateral APAs in cases where the relevant facts and circumstances in the earlier fiscal years are the same. Taxpayers filing for an APA may submit a relevant roll-back request, provided that the earlier fiscal years have not been time-barred and that there is no tax audit mandate communicated to the taxpayer with respect to the relevant fiscal years.
On another note, it is now clearly stated that the filing of amending tax returns pursuant to an APA decision shall not entail late payment interest and penalties, to the extent that these are filed within a deadline of thirty (30) days starting from the date of notification of the APA decision to the taxpayer. This clarification is welcomed by the stakeholders, who may qualify for an exemption from late payment interest and penalties even in cases where relevant amending tax returns have already been filed prior to the enactment of the new tax law.
Finally, the new law explicitly provides for an indicative 18-month deadline for the issuance of a unilateral APA decision; this amendment reflects the stance already assumed by the Greek tax authorities, that in terms of bilateral or multilateral APAs, such timeframe was not applicable.
Greece transposes the EU Tax Dispute Resolution Directive
By virtue of the new tax law ratified a few days ago, Greece transposed the EU Tax Dispute Resolution Directive. The new rules move beyond transfer pricing to cover all cases of cross-border tax disputes between Greece and other EU member states arising out of the interpretation and application of Double Taxation Conventions (“DTCs”). The provisions are also applicable to individuals.
III. Settlement procedure in a nutshell
As a first step, the taxpayer facing tax disputes that arise from the application of a DTC submits a complaint to the tax authorities of the EU countries concerned.
Should the complaint be accepted by one of the tax authorities, a mutual agreement procedure (“MAP”) is initiated by the two Member States which must try to resolve the dispute amicably within two years.
If no solution has been found at the end of this two-year period, the taxpayer can request the setting up of an Advisory Commission to deliver an opinion according to the following procedure:
The filing of an appeal before the competent Greek Administrative Court concerning the disputed matter does not preclude the filing of the complaint under the abovementioned procedure. However, the dispute resolution procedure shall end in case an irrevocable national court decision of any of the member states concerned is issued.
The new framework in principle applies to complaints submitted following publication of the law in the Government Gazette, relating to tax disputes concerning years starting on or after 01 January 2018.
A Decision by the Governor of the Independent Authority for Public Revenue shall determine the implementation of the above procedure and any other relevant matter.