Interest & Royalties domestic taxation and the benefits while applying the E.U. Interest & Royalties Directive 2003/49
Interest & Royalties
Interest and royalties derived by non-resident companies without a permanent establishment in Greece are generally subject to a 20% withholding tax. The rules provided by Greek tax legislation also apply to non-resident companies with a permanent establishment in Greece.
E.U. Interest & Royalties Directive 2003/49
Greece has implemented the E.U. Interest & Royalties Directive, but transitional rules have been adopted. In concrete, for tax years from 2005 – 2012 payments of interest or royalties made to an associated company of another Member State or to a permanent establishment situated in another Member State of an associated company of a Member State must not exceed a 10% tax and for tax years from 2013 – 2016 a 5% tax, unless there is a favourable treatment, resulting from a Double Tax Convention. Regarding tax years from 2017 and after the transitional period ceases and in the case where the Directive’s conditions are met the payments of interest or royalties will be tax exempt.
Interest from foreign bank deposits and bonds is subject to a 10% withholding tax.
If interest or royalties arising abroad are paid (or attributed) to a permanent establishment of a resident company abroad, they form part of the permanent establishment’s profits which are taxable abroad. Such profits will also be subject to tax in Greece constituting a part of the resident head office’s profits with a credit being given for the foreign tax up to the amount of the corresponding Greek tax.
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