A bill passed four months ago requires the Greek State to retroactively return taxation payments received by overseas legal firms on profits they gained in previous years for their activities in Greece.  Law 4254/2014 for the “support and development of the Greek economy”  gives tax exemptions to foreign firms at a time when Greeks have been forced to endure austere measures and sacrifice with harsh regulations oftentimes criticized as being unconstitutional.

Parliament enacted the Law on March 30 and includes a series of tax amendments. Some of the provisions of the rules exempt legal entities from tax exemptions in Greece and in the EU. Income tax  exemptions also apply to interest deriving from bonds issued by the European Financial Stability Facility (EFSF) following a PSI scheme extended to cover legal entities.

The condition allowing income tax exemption for intercompany dividends is modified to cover only intercompany dividends that are paid to domestic legal entities from their affiliates that are tax resident in other EU Member States/countries of the European Economic Area or a country with which Greece has a Double Tax Treaty (DTT) whereas before the amendment this condition required merely that such entity not be resident in a non-cooperating country. Such exemption further covers intercompany dividends received by Greek permanent establishments of companies that are tax resident in other EU Members States or in countries of the European Economic Area.

It is estimated that 20 million euros will need to be returned to foreign companies by the Greek state as a result of this law.