In a welcome development, a law published on 5 December 2024 expands the scope of the Greek participation exemption for intragroup dividends and capital gains from share transfers to apply to legal entities to dividends and capital gains derived from subsidiaries based outside the EU.
Currently, Greek parent companies are exempt from tax on dividends from EU-based subsidiaries and capital gains from the sale of shares in EU-based subsidiaries. The aim is to prevent double taxation on income already taxed at the level of the subsidiary, a principle applied to intra-EU parent-subsidiary arrangements. By extending the exemptions to non-EU subsidiaries, the measure eliminates a major barrier to investments in non-EU countries. Most EU member states already exempt such income, regardless of whether the subsidiary is within or outside the EU. It should be noted, however, that the exemption for non-EU subsidiaries does not apply to subsidiaries in noncooperative states in the field of taxation.
As from tax year 2025, intragroup dividends and capital gains derived by a Greek resident legal entity from a legal entity established outside the EU are exempt from tax if the distributing entity fulfils all of the following conditions:
Theodoros Kindis
Asimina Sotiriou
BDO in Greece
Currently, Greek parent companies are exempt from tax on dividends from EU-based subsidiaries and capital gains from the sale of shares in EU-based subsidiaries. The aim is to prevent double taxation on income already taxed at the level of the subsidiary, a principle applied to intra-EU parent-subsidiary arrangements. By extending the exemptions to non-EU subsidiaries, the measure eliminates a major barrier to investments in non-EU countries. Most EU member states already exempt such income, regardless of whether the subsidiary is within or outside the EU. It should be noted, however, that the exemption for non-EU subsidiaries does not apply to subsidiaries in noncooperative states in the field of taxation.
As from tax year 2025, intragroup dividends and capital gains derived by a Greek resident legal entity from a legal entity established outside the EU are exempt from tax if the distributing entity fulfils all of the following conditions:
- It has the legal form of a capital company under the laws of its country of establishment;
- It is not based in a noncooperative state;
- It is subject to corporate income tax or a similar tax, without exceptions or elections;
- The Greek entity owns at least 10% of the share capital or voting rights (share capital, basic capital or voting rights in the case of capital gains) in the distributing entity; and
- The 10% participation is held for at least 24 months.
Theodoros Kindis
Asimina Sotiriou
BDO in Greece