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Greece: Intragroup dividends withholding tax exemption

Intragroup dividends paid or earned as of 1 January 2014 are exempt from local withholding tax if they meet the following criteria:

If they are received by a Greek Entity the withholding tax exemption applies when:
The participation percentage-shareholding of the payee to the payer is more than 10% and this participation-shareholding lasts for more than two consecutive years (24 months) when the decision for the dividends takes place, and the payer is a legal entity included in the EU Parent Subsidiary Directive 2011/96/EU.

If they are distributed by a Greek Entity the withholding tax exemption applies when:
The participation percentage-shareholding of the mother company to the Greek Entity is more than 10% and this participationshareholding lasts for more than two consecutive years (24 months) when the decision for the dividends takes place, and the payer is a legal entity included in the EU Parent Subsidiary Directive 2011/96/EU.

When the above requirement of the participation-shareholding for more than two consecutive years (24 months) is not met, but all the other conditions are met, the distribution can be exempt of withholding tax provided that the legal entity deposits a bank guarantee of an amount that is based on a specific calculation.

The Greek Ministry of Finance issued guidance on 26 January 2015 (POL 1039/2015), which includes in the withholding tax exemption new company formats such as IKE, which are subject to corporate tax in Greece. This guidance also includes instructions and examples with respect to the calculation of the amount of the bank guarantee.

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