All questions

Tax residence and fiscal domicile

Greece (a member of the OECD since 1961) has signed and ratified 57 bilateral conventions for avoiding double taxation with third countries. See Section VII.iii for further information.

i Corporate residence

Legal entities of any type, as long as they are considered to be Greek tax residents, are subject to corporate tax in Greece on their worldwide income.

A legal entity is considered to be a Greek tax resident in the following cases: it is incorporated or established under Greek law; it has its registered office in Greece; or the place of its effective management is in Greece at any time during the tax year. The 'effective place of management' concept should be reviewed on an ad hoc basis as per the factual background of each case. To this end, indicative criteria are listed (such as the place of the day-to-day management of the company, place of strategic decision taking, place where the annual general meeting of shareholders or partners or the board of directors takes place, place where the accounting books of the company are held, residence of the members of the board of directors) without, however, excluding additional factors that, while they might not on their own substantiate the existence of tax residence in Greece, are taken into account when determining the place of effective management (such as the residence of the majority of shareholders or partners). It has been clarified that these provisions do not apply to companies subject to tax under Law 27/1975 and Legislative Decree 2687/1953 (shipping entities).

ii Branch or permanent establishment

The definition of PE in the ITC is compliant with Article 5 of the OECD Model, with the only exception of technical projects for which a three-month period is provided for the substantiation of a PE, as compared with the 12 months provided in the Model.

In the past, the domestic provision (under the previous ITC) was interpreted by the tax authorities in a manner that resulted in the substantiation of a PE for the provision of services in many cases (such as the dependency element regarding dependent, independent or undisclosed commission agents, judged each time on the factual background) and consequently for such PE to be burdened with Greek taxation. In this respect, the provision of services on technical projects in Greece has always been challenged by the Greek tax authorities. Recently, it has been established by the Supreme Administrative Court that the crucial element is whether the services provided are essential for the completion of the project and subsequently the substantiation of a PE for the foreign provider.

In any case, the provisions of various DTTs override the provisions of domestic law, which is applicable in the absence of any DTTs.