Effective tax structuring in Greece requires careful alignment of Greek domestic law, EU anti-avoidance directives and the commercial substance requirements that tax authorities increasingly scrutinise. Whether you are designing a holding structure, managing transfer pricing risk or planning an exit, the quality of the legal and tax architecture put in place before a transaction determines what risks crystallise later. Ferraz & Whitmore advises international businesses and investors on building and maintaining structures that are both efficient and defensible before the Hellenic tax authority (AADE) and the courts.
When Businesses Typically Need This Service
Tax structuring and risk management in Greece become critical at several junctures in the lifecycle of a business or investment. The most common triggers are not always obvious at the time – many clients approach us after an opportunity has already been lost or a liability has already arisen.
- Pre-investment structuring: Choosing the right holding vehicle, financing method and IP ownership arrangement before committing capital to Greece.
- Reorganisations and redomiciliation: Cross-border mergers, demergers, conversions and the transfer of registered offices all carry tax consequences that must be mapped before the corporate steps are taken.
- Acquisitions and disposals: Tax due diligence on a Greek target, structuring the acquisition vehicle, and planning the exit to optimise withholding tax exposure on dividends and capital gains.
- Ongoing compliance risk: Transfer pricing documentation, DAC6 mandatory disclosure obligations and the operation of a tax control framework to avoid unexpected assessments.
- Inbound talent and executives: Greece offers specific regimes for new residents and inbound employees; integrating these with group compensation structures requires careful analysis.
If your group is already operating in Greece and has not recently reviewed its structure against the EU Anti-Tax Avoidance Directive framework, the probability of unmanaged risk is significant. We are happy to discuss a preliminary risk mapping exercise – write to us at info@ferrazwhitmore.com or visit our contacts page.
Legal Instruments and Structural Options
Holding Companies and Participation Exemption
Greece implements the EU Parent-Subsidiary Directive, and the participation exemption on dividend income is a central tool in holding structures. However, the exemption is subject to anti-avoidance conditions: the arrangement must not be artificial, and the receiving entity must have genuine substance. AADE has become more attentive to substance in recent years, examining whether a Greek or foreign holding company has genuine economic activity rather than a purely tax-driven presence.
When a Greek entity holds participations in subsidiaries elsewhere in the EU or in third countries, the interaction with controlled foreign company (CFC) rules – implemented under Directive (EU) 2016/1164 – must be reviewed. Profits parked in low-taxed subsidiaries may be attributed back to the Greek parent unless an adequate substance defence is available.
Financing Structures and the Interest Limitation Rule
The interest limitation rule, also derived from Directive (EU) 2016/1164, restricts the deductibility of net borrowing costs beyond a defined threshold linked to taxable earnings. Groups that fund Greek operations through intercompany loans must model this rule at the entity level and across the group to avoid inadvertent non-deductibility. The interaction with transfer pricing requirements – particularly the arm's-length pricing of intragroup financing – adds a further compliance dimension.
IP Structures
Intellectual property ownership and royalty flows into or out of Greece require analysis of withholding tax rates under the applicable double tax treaty, the anti-hybrid rules introduced by Directive (EU) 2017/952, and the general anti-abuse rule. Where a group is considering relocating IP to or from Greece, the exit taxation rules under the ATAD framework also apply and must be factored into the transaction timeline.
Special Regimes
Greece has introduced specific regimes targeting inbound investors and professionals, including a non-domiciled lump-sum regime for qualifying new residents and a regime for inbound employees. These regimes can form part of a broader remuneration and equity planning strategy for key personnel relocating to Greece, but their interaction with the individual's home country tax treatment requires cross-border analysis.
For a broader overview of the Greek tax landscape, see our general Greece tax law page. This page focuses on the commercial structuring and risk management dimension.
Tax Due Diligence and Risk Assessment
A tax due diligence exercise in Greece covers the target's historic compliance, open assessment periods, transfer pricing documentation adequacy, any pending or threatened audits, and exposure under DAC6. The mandatory disclosure regime under Directive (EU) 2018/822 (DAC6) requires reporting of cross-border arrangements that meet defined hallmarks; national penalty regimes for non-disclosure differ between Member States, and a Greek filing obligation may coexist with obligations in other jurisdictions.
Beyond transaction-specific due diligence, groups benefit from a standing tax control framework: a documented governance process that maps tax risks, assigns ownership and establishes procedures for identifying and responding to new obligations. AADE has increasingly rewarded cooperative compliance and clear documentation; a robust framework reduces both the likelihood of an assessment and the exposure if one occurs.
Advance Certainty: Rulings and Circulars
AADE issues rulings and circulars that provide guidance on the application of Greek tax law to specific factual situations. Obtaining a ruling before implementing a structure provides a degree of certainty and, where binding, a defence against subsequent challenge. The process requires a precise description of the intended arrangement; vague or incomplete submissions are less likely to yield useful outcomes.
Rulings are not always available for every type of transaction, and their binding effect has limits. Where a ruling cannot be obtained, documenting the analysis and the commercial rationale at the time of implementation remains the best available protection.
Managing Disputes and the Administrative Process
When AADE issues a tax assessment, the dispute path in Greece follows a prescribed sequence. A mandatory administrative appeal must first be lodged with the Dispute Resolution Directorate (DED). Only after the DED has ruled can the taxpayer proceed to the administrative courts and, ultimately, to the Council of State. This sequential structure means that the quality of the DED submission is critical: arguments not properly raised at the administrative stage may be harder to advance before the courts.
Early engagement with the dispute – before an assessment is finalised – is often the most effective approach. Our tax disputes team advises on responses to audit enquiries, voluntary disclosure considerations and the structuring of administrative appeals. Further detail on the dispute resolution process is set out on our Greece tax disputes page.
Cross-Border Dimension and Pillar Two
Greek operations of multinational groups must now be considered in the context of the OECD Pillar Two global minimum tax framework. Groups that meet the revenue threshold are subject to a minimum effective tax rate, and the top-up tax mechanism may alter the economics of structures that previously relied on differential tax treatment. Planning for Pillar Two is not a one-time exercise; it interacts with transfer pricing, CFC rules and the participation exemption in ways that require ongoing monitoring.
For groups with operations across multiple jurisdictions, the interaction of Greek rules with those of other holding or intermediate locations is equally important. Our analysis of how global minimum tax rules intersect with existing incentive regimes in other jurisdictions – including the discussion available in our deep-dive on Singapore incentives and Pillar Two – illustrates the kind of cross-jurisdictional thinking that effective structuring requires.
If your group is assessing the impact of Pillar Two on its Greek operations or reconsidering its holding structure in light of recent AADE guidance, our team can assist. Contact us at info@ferrazwhitmore.com or through our contacts page to arrange a preliminary discussion.
How Ferraz & Whitmore Works on These Matters
Our approach begins with understanding the commercial objective and the existing structure. We map the tax risks and opportunities against Greek domestic law, applicable double tax treaties, and EU directives, and we present options with a clear assessment of the legal basis, the substance requirements and the risk profile of each. Where a structure involves more than one jurisdiction – which is typical for our clients – we coordinate with local counsel as needed to ensure consistency.
On risk management mandates, we work with the client's finance and legal teams to build or review the tax control framework, prepare or review transfer pricing documentation, and assess DAC6 reporting obligations. For transactional work, we integrate tax structuring advice with our corporate law capability; a description of our corporate law services in Greece is available at ferrazwhitmore.com/services/corporate-law/greece/.
Self-Assessment Checklist
The following questions are intended to help you identify whether a structured review of your Greek tax position would be useful:
- Has your group's holding or financing structure been reviewed against the ATAD interest limitation and CFC rules since they were transposed into Greek law?
- Do your intercompany transactions with Greek entities have current, documented transfer pricing analyses?
- Has your group assessed its DAC6 disclosure obligations in respect of arrangements involving Greece?
- Are the substance requirements for any participation exemption or treaty benefit claims properly documented and maintained?
- Has the impact of Pillar Two on your Greek effective tax rate been modelled?
- Is there a documented process for identifying and responding to new Greek tax obligations as they arise?
- If an acquisition or disposal of a Greek business is planned, has the tax structure of the transaction been reviewed before heads of terms are agreed?
If one or more of these questions does not have a clear answer, a structured review is likely warranted. We would be glad to discuss your situation in confidence – please reach out to us at info@ferrazwhitmore.com or use our contacts page.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.