OPERATION OF LEGAL ENTITIES IN GREECE
Within the framework of a foreign company operating in Greece, the Law predicts a number of cases. Some distinctive cases of a foreign company establishment in Greece are mentioned below. These cases are dealt with differently, depending on the field a company operates, τhe activities it is involved in and the predicted services duration of each legal entity.
According to the ordinances in effect, and in particular to Article 6, Law 4172/2013 in combination with the Covenant for Avoidance of Double Taxation (C.A.D.T), a foreign company can acquire permanent establishment in Greece provided it meets the legislative requirements and depending on the field it operates in and the predicted duration of its activities.
Establishment of a subsidiary
Many foreign companies choose to set up subsidiaries in Greece, the form of which they are free to choose (e.g. Ltd, S.A. etc)
The suitable form in which the subsidiary is going to be in depends on the investor’s business expectations and demands, as each form bears certain legal and taxing advantages and drawbacks.
Finance and Accounting Consulting as an expert tax-preparing consultant is here to provide you with the best advice on the most suitable form your subsidiary should have.
Some regulations permeating the establishment of subsidiaries in Greece are mentioned below.
In accordance with the taxation ordinances in effect, the taxation rate for all company forms is 29%.
The allocation of profits (dividends) is taxed in compliance with the valid ordinances and is at a 15% rate. Here, it should be taken into consideration that the regulation applies to the case where a foreign company based in a E.U member state or in the European financial space, participates in the capital of the newly-established subsidiary. In this case, according to the stipulations and the ordinances of Article 48 and 63, Law 4172/2013, their dividends are exempted from taxation in the country. However, whether dividends are liable to taxation in the E.U. member state of the participating company will have to be examined.
The taxing inception of a company on the tax services registry is implemented according to legislation regulations of Article 10, Law 4174/2013. You can address your inquiries as to the above to Finance and Accounting Consulting S.A.
For companies which have permanent establishment in Greece or sell their products from distance (Article 13, Law 2859/2000, VAT code) and wish to obtain a Tax Registry Number, there are particular procedures which, among other things, presuppose that the company has a taxation delegate in Greece.
Special property tax
Legal entities falling under Law 3091/2002 ordinances that have universal or naked property rights on assets in Greece, are obliged to disburse a special annual tax (15% of the property value according to Article 17, Law 309/2002). Under certain circumstances, they can be exempted from paying this tax.
The latest developments make Greece a very attractive country for investors as regards the employment costs.
There are many companies that operate here motivated by the low salary costs and bill the mother company abroad for this cost.
There is, though, the possibility (under certain circumstances) for a foreign company to employ work force in Greece without permanent establishment in the country and without receiving an employer’s registry number.
**The above information are purely indicative and do not constitute specialized advice from an expert tax-preparer or accountant.