Greece: Capital Gains Tax update
The Greek Ministry of Finance issued circular (POL) 1032/26.012015 to provide clarifications to Law 4316/2014 with regards to the implementation of the Capital Gains Tax (CGT).
This is further to our announcements A13202, dated 31 December 2013, A14063 dated 5 May 2014 and A14072 dated 19 May 2014.
Background
From 1 January 2014, CGT has only been applicable to individuals (residents and non-residents) at a rate of 15%.
An exemption of CGT is available to non-resident investors if a double taxation treaty is in place and providing that the relevant documentation is submitted to the Greek Tax Authorities.
Law 4316/2014 published on 24 December 2014 and further clarified by circular (POL) 1032/26.01.2015 provides, among other clarifications, the following additional information:
- Non-resident legal entities: capital gains derived from the sale of securities is considered business income and is subject to tax at the rate of 26%. This only applies if the foreign legal entities have a permanent establishment in Greece. If the foreign legal entities do not have a permanent establishment in Greece, no income tax is due in Greece and no zero tax return needs to be filed.
- Non-resident individuals may continue to request exemption according to the DTT in place, based on specific certification requirements.
Customer impact
No CGT will be applied on Greek equities and bonds held in Clearstream Banking1. However, final beneficial owners that are liable to CGT will be responsible for declaring the gains to their local tax authorities according to the latest provisions of the Greek law. Beneficial owners should consult with their tax advisor on this matter.
Customers are reminded that, in line with the current holding restriction, they may not hold Greek corporate bonds in Clearstream Banking, whether they are themselves Greek tax residents and beneficial owners of such corporate bonds or if they hold such corporate bonds on behalf of a beneficial owner that is Greek tax resident.
Furthermore there is no impact on Greek Sales Tax, which will continue to be applied despite the CGT implementation.
Further Information
For further information, customers may contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or their Relationship Officer.
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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500 and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B-9248.