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Managing Taxes
 Greece: capital gains tax for non-residents on gains from Greek bonds, immediate action required
The Greek Ministry of Finance issued recently a Circular (Circular POL 1117/25.04.2014) in relation to capital gains on Greek debt realised by non-resident beneficial owners. The key points of this Circular are summarised below:
  • The provisions of the Circular refer to both non-resident individual and non-resident legal entities without a Greek permanent residence/establishment that have realised capital gains from Greek debt (including government and corporate debt which is either listed or unlisted) in the period between 29 February 2012 and 31 December 2013.

  • The tax imposed on such capital gains is 33% for legal entities and 20% for individuals.

  • The responsibility to calculate and pay the above tax to the Greek tax authorities lies with the foreign beneficiaries, both in case where there was no Greek intermediary or where there was a Greek intermediary involved in the transaction but the relevant transfer of bonds were made through collective (omnibus) customer accounts.

  • The foreign beneficiaries must remit the tax due within two months from the issuance of the Circular, i.e. by 25 June 2014 by submitting a tax return. The tax return has to be accompanied by documentation issued from its custodian(s) which discloses capital gains/losses realised from Greek debt from February 29, 2012 to December 31, 2013.

  • From a procedural point of view, the foreign beneficiaries must appoint a tax representative in Greece and acquire a Greek tax registration number.

  • In case the beneficial owners are tax residents in a country that has signed a double tax treaty (DTT) with Greece, they can benefit from the DTT upon filing a treaty application form incorporating a tax residence certificate. It is recommended that the treaty relief application is filed before 25 June 2014.

Given the tight deadline under the Circular, the potential penalties and the interest to be applied in case of non-compliance, immediate action is necessary by foreign beneficiaries. Considering further the uncertainties still existing especially in connection with the practical implementation of the new guidelines, specialists' advice should be sought.

PwC can support in advice referring to a detailed analysis of the exposure and the procedure as well as serve as tax representative in Greece.
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 Anna-Maria Widrig Giallouraki

Birchstrasse 160
Postfach, 8050 Z├╝rich
+41 58 792 42 87

Maria Widrig Giallouraki is a Senior Manager in Corporate Tax, specialised in advising international corporate groups on tax structuring. Maria is further due to her background and working experience specialised in EU tax matters and in charge of EU direct tax law at PwC Switzerland, actively acquiring EU related tax mandates for Swiss multinationals and their EU subsidiaries. Finally, due to her background and working experience in Greece, Maria is also in charge of cross-border structuring cases involving Greek companies and entrepreneurs.
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