Greece: Thin capitalisation rules

On 31 December 2013, the Greek parliament approved an amendment to the thin capitalisation rules. Greek thin capitalisation rules apply to all types of loans. This includes intragroup loans as well as third party loans, regardless of whether or not that third party is a certified financial institution. However, under specific circumstances, the thin capitalisation rules do not apply to loans used to fund public works or services.

As of 31 December 2013, the following changes have been made to the Greek thin capitalisation rules:

  • The principle deductible percentage of the net interest expenses increased from 25% to 30% of the earnings before interest, tax, depreciation and amortization (EBITDA)
  • The maximum of net interest expenses that can be deducted as annual business expenses is raised from EUR 1 million to EUR 3 million
  • Net interest expenses that cannot be deducted in the fiscal year of payment, may be carried forward indefinitely

Furthermore, besides raising the principle deductible percentage of the net interest expenses from 25% to 30% of the EBITDA, the Greek parliament also approved higher percentages for the next three years. Instead of 30% of the EBITDA, the percentages will be the following:

  • As of 1 January 2014: 60% of EBITDA
  • As of 1 January 2015: 50% of EBITDA
  • As of 1 January 2016: 40% of EBITDA

Finally, the deductible net interest expense is capped at EUR 5 million annually until 31 December 2015 (instead of the EUR 3 million the principle maximum has been raised to on 31 December 2013).


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