The Greek tax authorities have recently issued a Ministerial Decision by the Minister of Finance (circular ΠΟΛ. 1173/2017) with the list of the countries having a privileged tax regime under the provisions of the Greek Code of Income Tax for the years 2016 and 2017.

Greece included in the preferential tax regimes of 2016-2017

As provided for in the Greek Code of Income Tax, the taxable income of any Greek natural or legal person or legal entity which directly or indirectly owns more than 50% of the shares or of the voting rights or of the capital or has the right to gain more than 50% of the total profits of a legal person or legal entity which is resident[1] in one of the countries included in the list, should be increased to the extent that it includes the undistributed income of that legal person.

Specifically, in case of EU Member States or members of the EEA which are included in the list, the abovementioned provision does not apply, provided that it can be adequately proven that the legal person or legal entity which is resident in that country, carries on genuine economic activities and it is established in order to pursue real business and not as part of a tax avoidance plan. Evidence that might be accepted by the tax authorities towards that direction is among others the conduct of real business, the personnel employed in the host country and existence of natural presence there.

According to the circular the following countries are included in the relevant list:

Albania, Andorra, Anguilla, the Bahamas, Bahrain, Belize, Bermuda, Bonaire, Bosnia-Herzegovina, British Virgin Islands, Bulgaria, Cayman Islands, Cyprus, FYROM, Gibraltar, Guernsey, Hashemite Kingdom of Jordan, Hungary (only for 2017), Ireland, Isle of Man, Jersey, Kosovo, Liechtenstein, Macau, Marshall Islands, Montenegro, Monaco, Montserrat, Nauru, Oman, Paraguay, Qatar, Republic of Maldives, Republic of Moldova, San Marino, Saudi Arabia, Seychelles, Sri Lanka, St. Eustatius, Turks and Caicos, United Arab Emirates, Uzbekistan, Vanuatu.


[1] The term “resident” is used with the meaning of “tax resident as it is defined under the Greek Code of Income Tax (Law 4172/2013)