Corporate - Significant developments

Last reviewed - 14 September 2022

Implementation of Anti-Tax Avoidance Directive (ATAD) II

The ATAD II Implementation Regulations apply to Greek residents, including permanent establishments (PEs) of non-resident companies, and to all entities treated as transparent for tax purposes in Greece with effect from 1 January 2020, with the exclusion of certain financial instruments from the application of anti-hybrid rules until 31 December 2022, which shall apply with effect from 1 January 2023.

In particular, according to the provisions of ATAD II, if a payment on a financial instrument gives rise to deduction without inclusion, then there is a 'hybrid mismatch' if (and only if) the mismatch is caused solely by a difference in characterisation of the instrument or payment, typically because the 'payer' jurisdiction treats the instrument as debt and the 'payee' jurisdiction treats it as equity.

A mismatch arises not only if the payment is completely tax exempted in the jurisdiction of the payee because of its character, it also arises if the character of the payment causes it to benefit from any type of tax relief (e.g. a reduced tax rate or partial exemption).

Conversely, there is no mismatch if the reason for tax exemption or relief is that the recipient is tax exempt or has a special tax status (e.g. is a tax exempt fund). The payee jurisdiction is any jurisdiction where that payment is received or is treated as being received under the laws of any other jurisdiction.

COVID-19 tax measures

As a result of the COVID-19 pandemic, the Greek government has introduced various tax measures. For more details, see PwC's COVID-19 Updates.