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Which deals with Greece will not be subject to a 26% tax

25 April 2015 / 09:04:13  GRReporter
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The Ministry decision, announced yesterday and submitted for public discussion, opens a 'door' for exempting firms from the prior payment of the disputed tax at the rate of 26% for deals with countries having a preferential tax regime such as Cyprus and Bulgaria.
After the storm of reactions provoked by the regulation voted in the parliament and after negotiations between Greece and Cyprus at the highest level, the Ministry of Finance backs down and exempts deals from the tax payment subject to prior approval from the tax authorities. According to the ministry decision these are particularly deals with countries having a preferential tax regime and they can obtain such prior approval before the tax inspection through an electronic procedure for announcing the deal. The prior approval will exonerate a firm from paying the tax of 26% in advance, which is a condition for acknowledging the expenditures. The prior approval of a deal and exoneration from the tax payment in advance is given in the case that a firm declares the particular deal to the tax service within 10 days after its completion, and provided that the following conditions are satisfied:
1)  The prior approval of a deal occurs automatically after filing the relevant declaration if the tax-payer declares that the following categories are valid for them:
• The case in point is a deal for which there are documents from the country where the invoice is issued and they certify the transportation and receiving of the goods or, if services are in question, offering a service is performed by the country having issued the invoice and which has a delivery-acceptance protocol for the accomplished work.
• The case in point is a deal connected with the importation of electricity, water and natural gas into Greece.
• The case in point is a deal listed on a stock exchange abroad during the deal accomplishment.
• The case in point is a deal the sum from which, put together with other deals, does not exceed 10,000 euros during the respective tax year.
• The case in point is a repetitive deal of the same type with one and the same supplier and a subject of barter without a considerable price change, particularly above 5%, and there has been a prior approval for the primary deal during the last 12 months.
• The case in point is a deal with products or goods the price of which is defined on an organized stock market, provided that the deal is accomplished on the basis of the closing price on the respective date, a fact for which all the necessary documents are available – proofs.
• The case in point is plane rental registered in countries with no cooperation being signed, or countries which are liable to a preferential regime, and planes being rented by airlines or branches of foreign firms with headquarters in Greece.
 • The case in point is a ship charter.
2)  The prior approval is given to any other deal if the tax-payer declares having in possession documents certifying the following:
• A written contract for a project or a trade contract that defines the deal's conditions.
• Financial reports from the last three years of the foreign firm, if it has been in operation for more than three years, or respectively financial reports from the last 1 or 2 years, if the firm has been operating for less than 3 years.
• A declaration for clients – suppliers or clientele of the foreign firm, from which it is seen that the Greek firm is not the only client, or a list with the constant expenditures or the expenditures for the foreign firm rental, from which the presence of constant expenditures above 10,000 euros and rent expenditures above 5,000 euros for the last year is seen.
 • Invoices payment by bank or the existence of a bank guarantee relating to the particular deal.
When for the particular deal from the declaration of the tax-payer it becomes clear that the conditions for issuing a prior approval are satisfied, then the particular deal is no longer subject to tax and the tax-payer can acknowledge the expenditures.  If, during the processing of the declaration, it becomes clear that the conditions for the prior approval of the deal are not satisfied, the tax authorities issue an order for an inspection.
A tax of 26% will have to be paid in advance by those firms which do not perform the necessary actions for the prior approval of their deals. This advance tax has to be paid by the end of the following month after the deal accomplishment, unless the respective declaration for announcing the deal is filed. If the filed declaration for announcing the deal is found incorrect by the inspectors, the advance tax becomes executable by the end of the following month after the deal accomplishment.  The tax paid in advance is given back within a month after the inspection if it finds the particular deal real and normal. The tax paid in advance is given back within 3 months after the tax-payer's declaration filing if the inspection is not completed. In order for the tax paid in advance to be deducted in the annual tax declaration of the tax-payer, they have to perform a tax legalization of the respective expenditure. Furthermore, if the inspection finishes and it is found that the deal under inspection is not a normal or real one, then an order is issued for regular inspections of the particular firm. 

 

Tags: preferential tax regime 26% tax deals with Greece Greek Ministry of Finance
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