Wednesday, 25 March 2015

Greece subjects corporate expense deductibility to administrative burden and potential 26% 'withholding tax'

The Greek Parliament enacted, on March 21, 2015 L.4321/2015, which includes a provision that introduces significant procedural requirements for deducting certain corporate expenses.  This provision, which has many issues open to interpretation, could create administrative and cash-flow difficulties for multinational companies.

Greece's Finance Minister is expected to issue a 'Ministerial Decision', which should provide practical guidance for implementing the provision.  Hopefully this Decision will resolve the open issues and abolish or restrict the severe 26% 'withholding tax' for 'ordinary' transactions.

Potentially affected companies should consider how this new provision could increase the cost of doing business in Greece.  Furthermore, companies should submit their concerns, along with possible alternatives to the Greek Finance Minister as the government develops the Ministerial Decision.

Source & more info: PwC