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Transfer Pricing Regulations in Greece
Greece has embraced the guidelines set by the OECD in its transfer pricing regulations. These rules are an integral part of the Greek Income Tax Code. The arm’s length principle, central to transfer pricing, is enshrined in this code.
Legal Framework
The legal framework in Greece for transfer pricing encompasses several laws and codes:
Law 4172/2013 (new Income Tax Code since January 1, 2014).
Law 4174/2013 (the Tax Procedures Code, effective since January 1, 2014).
Law 2238/2013 (as amended for transactions until fiscal year 2013).
Law 3728/2008 (for transactions during fiscal years 2008, 2009, and 2010).
Ministry Circular 1097/2014 (amended by POL. 1144/2014 and 1284/2013).
Relevant guidelines issued by the General Secretariat of Public Revenues on Advance Pricing Agreements (APAs).
L.4484/2017 (Adaption of Greek legislation to the provisions of the Greek Directive).
References to OECD and Local Rules
Greek transfer pricing laws are based on the principles of the OECD Guidelines. Tax authorities must consider these Guidelines when making rulings on transfer pricing matters. The Income Tax Code and the Tax Procedures Code reference and implement the OECD transfer pricing methods, aligning local rules with international standards.
Definition of Related Party
The definition of related parties in Greece is articulated in Article 2(g) of the Greek Income Tax Code (L.4172/2013). It includes persons with direct or indirect involvement in management, control, capital, or who own shares, profit rights, or voting rights of 33% or more, among other criteria.
Nature of Transfer Pricing Documentation
Greece adopts a three-tier approach to transfer pricing documentation, comprising a Master file, Greek file, and Country-by-Country Reporting (CbCR). The CbCR requirement applies to consolidated groups with a turnover exceeding €750,000,000. Certain exemptions from documentation requirements are available based on transaction values and gross revenues.
Tax Havens & Blacklists
Greece maintains a list of non-cooperative jurisdictions for tax purposes, which is updated biannually. The list comprises several countries, and an updated version is expected for 2021. Additionally, Greece identifies jurisdictions with preferential tax regimes, considering any country with a corporate income tax rate equal to or lower than 14.4%.
Advance Pricing Agreements (APAs)
Greece’s legal framework allows for APAs, which can be unilateral, bilateral, or multilateral and address complex transfer pricing cases. The General Directorate of Tax Audits and Public Revenues (GDTAPR) oversees APA examination. APAs in Greece have a maximum application period of four years and offer double taxation relief.
Audit Practice
Tax authorities target taxpayers for transfer pricing scrutiny in cases of tax obligation violations, significant deviations from industry averages, and losses attributed to trading companies.
Transfer Pricing Documentation Requirements
Greece mandates three types of TP documentation: Master file, Local file, and CbCR. Each file corresponds to specific OECD Guidelines. A Summary Information Table is also required and must include MNE information, functions, risks, and TP methods.
Penalties and Interest Charges
Greece imposes penalties for late filing, inaccurate filing, and non-compliance with TP documentation requirements. Fines can range from a minimum to a maximum, with additional penalties for repeated violations. Failure to submit a CbCR incurs a fine of €20,000, while late or inaccurate CbCRs result in a reduced fine of €10,000.
