According to Law 4972/2022, Greek-affiliated companies have the possibility to readjust profits from transfer pricing transactions and avoid double taxation.
Περιεχόμενα Άρθρου
Transfer Pricing (L.4972/2022) – Correction of Profits
With the new tax reforms of Law 4972/2022, affiliated companies have the right to refund or set off tax on profits subject to tax in Greece.
Specifically, from September 2022, if it is established after a tax audit that the profits of the first legal entity, which is subject to tax in Greece, include additional profits from intra-group transactions, in the name of a related legal entity which is also subject to tax in Greece, then the second legal entity can request a corresponding adjustment to its taxable profits, by submitting an amending tax return.
This new tax provision is applicable to corrections of taxable profits which are carried out by acts of corrective tax assessment and issued after September 23, 2022. Also, the provision is valid for cases which are characterized as pending before the Tax Administration or regular administrative courts or of the CoE.
We note that Greek companies, in order to resolve tax disputes arising from intercompany transactions with related foreign companies, also have the possibility to avoid double taxation either through the mutual settlement process, or through pre-approval agreements for transfer pricing invoicing methodology.
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Conditions for the Correction of Taxable Profits
The second legal entity must submit the amending tax return within three (3) months from the notification of the act of corrective tax assessment. Along with the submission of the amending tax return, the audit report of the first related legal entity should also be notified.
Also, a necessary condition for the refund or offsetting of tax to the second legal entity is the payment, by the first legal entity of part of the tax resulting from the correction of intra-group transaction profits. Of course, the first legal entity reserves every right to dispute the act of corrective tax assessment.
Resolving Unequal Treatment of Domestic and Foreign Affiliates
The new regulation of Law 4972/2022 resolves the issue of double taxation of taxable profits in Greece, in the case of intra-group transactions of two domestic affiliated companies. Until recently, there was the problem of unequal treatment of domestic and foreign affiliates regarding double taxation.
As mentioned above, in the case of foreign affiliated companies there was the possibility either through the mutual settlement process or through the transfer pricing methodology pre-approval agreements to avoid double taxation.
Today, through Law 4972/2022, domestic affiliated companies can also avoid double taxation through the reverse tax reform and the correction of taxable profits transfer pricing transactions.
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How can QBC help you?
Keeping abreast of the latest developments in tax legislation, QBC is at your side to help you achieve maximum tax compliance and benefit for your business.
Through transfer pricing services, QBC undertakes to support you in the establishment, submission, and renewal of the documentation file, as well as during the tax audit by the Tax Authorities.
For more information on corporate tax and accounting, you can contact us by phone at 216 900 7576 or submit a contact request and one of our Consultants will serve you immediately.
