Greece: Tax exemption for legal entities on government bonds and Treasury bills
Law L.4254/2014 confirms the eligibility for foreign legal entities to be exempt from withholding tax (WHT) and capital gains tax (CGT) on income from holdings and transfers of Greek government bonds and Treasury bills.
This is further to information that we provided in L13181, dated 31 December 2013, L14002, dated 2 January 2014, and LT14011, dated 29 January 2014.
Background
Article 42 of L.4172/2013, amended by L.4254/2014, stipulates that foreign legal entities are so exempted.
Furthermore, in relation to CGT, it is stated that transfers of such securities in relation to shareholders holding less that 0.5% of the total share value of a listed company are exempted from CGT. At the same time, CGT will apply only to shareholders that obtained securities after 1 January 2009.
In practice, this means that CGT will apply only to shareholders holding more than 0.5% of the total share value, acquired after 1 January 2009 and sold after 1 January 2014.
We take this opportunity to remind customers that, according to the provisions of the Greek Income Tax Code (L. 4172/2013 art. 37 par. 2) and as of 1 January 2014, interest paid from Greek government bonds and Treasury bills to individuals (resident and non resident) is not taxable. This also applies to the accrued interest earned as of 1 January 2014 by individuals (resident and non resident) in respect of the above-mentioned securities.
Impact on customers
Withholding tax
No WHT is applied on interest payments from Greek government bonds held via Clearstream Banking.
Customers of Clearstream Banking1 are reminded that the following Greek residents are responsible for withholding, reporting and remitting any taxes to the Greek Tax Authorities in accordance with Greek law:
- Greek customers acting as intermediary;
- Greek customers acting as "Greek beneficial owner" (proprietary assets); and
- Greek beneficial owners holding via a non-Greek customer.
We do not assist in this regard but may be obliged, upon request, to disclose to the Greek Tax Authorities the identity of our customers, their holdings and the amount of income paid to the customer on Greek government debt securities.
Capital gains tax
We remind customers that no CGT is applied on Greek securities held in Clearstream Banking. However, final beneficial owners that are liable to CGT are responsible for declaring the gains to their local tax authorities. Beneficial owners should consult with their tax advisor on this matter.
Further information
For further information, customers may contact the Clearstream Banking Help Desk on:
| Luxembourg | Frankfurt | Singapore | |
| Email: | tax@clearstream.com | tax@clearstream.com | tax@clearstream.com |
| Telephone: | +352-243-32835 | +49-(0) 69-2 11-1 3821 | +65-6597-1665 |
| Fax: | +352-243-632835 | +49-(0) 69-2 11-61 3821 |
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 (CBF) 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 (CBL).
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