On 11 January 2013, the Greek Parliament adopted a new tax law.

The key tax measures with regard to company taxation, which generally apply from 1 January 2013, are summarized below.

• Introduction of a new tax schedule for partnerships, civil law societies, civil law companies and joint ventures maintaining single-entry books, as follows:

•  Increase of the corporate income tax rate to 26% (currently 20%). This applies to corporations (AEs), limited liability companies (EPEs), private capital companies (IKEs), branches of foreign corporations, cooperatives and state and municipal enterprises, and Greek or foreign non-profit entities.
• Reduction of the withholding tax rate on dividends and profit distributions to 10% (currently 25%).
• Introduction of new rules on the depreciation of fixed assets, applicable with respect to assets acquired as from 1 January 2013. The new rules provide for the depreciation of tangible and intangible assets using a common regular depreciation method, and abolish the declining balance method. The new law provides for a list of depreciation rates applicable for all industries, while exceptions are stipulated for specific industries, such as mining. Companies applying the declining balance method until 31 December 2012 are provided with the possibility to opt for the continuation of application of this method under certain conditions until the depreciation reaches 50% of the value of the asset. Once this amount is exceeded, the use of the regular depreciation method becomes compulsory.
• Introduction of an additional tax deduction of 30% of R&D expenses under certain conditions.
• Increase of the withholding tax rate on domestic and foreign-source interest on bank deposits, private bonds and repurchase agreements to 15% (currently 10%).
• Introduction of a 20% withholding tax on the capital gains derived from the sale of shares listed on the Athens Stock Exchange that are acquired from 1 July onward, without exhaustion of the income tax liability of legal entities.
• Introduction of a 20% withholding tax on the capital gains derived from the sale of shares in an unquoted corporation (AE) (currently 5% upon the sale of shares), without exhaustion of the income tax liability of legal entities. Special provisions are introduced with regard to the calculation of the capital gains in this case.
• Introduction of a 20% capital gains tax on the gains from the sale of immovable property or property rights after 1 January 2013. Special provisions are introduced with regard to the calculation of capital gains in this case.
• Amendment of the transfer pricing rules with regard to the applicable thresholds triggering transfer pricing documentation requirements as follows:
  • Groups of companies with an annual turnover not exceeding €5,000,000 shall not be subject to transfer pricing documentation requirements if their controlled transactions do not exceed €100,000 per year
  •  Groups of companies with an annual turnover exceeding €5,000,000 shall not be subject to transfer pricing documentation requirements if their controlled transactions do not exceed €200,000 per year.
• Introduction of advance pricing agreements (APAs) between Greek enterprises and the Greek tax administration in order to resolve ex ante (pre-empt) potential transfer pricing disputes.

The new rules enter into force on 1 January 2014.

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