Greece: Guidance on controlled foreign corporations

Detailed guidance, including examples, regarding controlled foreign corporations

Detailed guidance, including examples, regarding controlled foreign corporations

The Greek tax administration released Circular E.2018/2022 which provides detailed guidance, including examples, regarding controlled foreign corporations (CFCs). The guidance specifically addresses the following topics:

  • Definition of a CFC, including the participation requirement, the requirement that corporate income tax is actually paid, and the income requirement
  • Definition of “related” companies
  • Income categories
  • Calculation of CFC’s taxable income
  • Distribution of profits by the CFC and sale of participation in the CFC
  • Tax return of individuals
  • Cases when the CFC provisions do not apply, such as companies with substantial economic activity and shipping companies

KPMG observation

The guidance clarifies that the recently introduced CFC anti-abuse rule, aimed at the prevention of tax avoidance through the transfer of income to subsidiaries established in low-tax jurisdictions, applies to legal persons/legal entities as well as to individuals that hold CFCs.

Read a March 2022 report [PDF 223 KB] prepared by the KPMG member firm in Greece

 

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