New Greek Transfer Pricing rules in force

Article 26 of Law 3728/18-12-08 introduced the new transfer pricing rules that apply between related undertakings. They have been further elaborated by Ministerial Decision A2-8092/31-12-2008.

The new rules follow the OECD arm’s length principle of treating related enterprises within a multinational group and affirm the Comparable Uncontrolled Price method which compares the price at which a controlled transaction between the related undertakings is conducted to the price of a comparable uncontrolled transaction between independent undertakings. The burden of proof is on the related undertakings to show that intra-group pricing complies with said principle.

To this effect, all Greek multinational companies regardless of type or form, as well as all foreign companies that conduct their business in Greece, must prepare detailed standardized documentation and reports of all their intra-group transactions. Such reports must be made available to the relevant authorities within a month from any such request. Details of all intra-group transactions in a fiscal year must also be submitted to the relevant authorities within 4 months and 15 days from the end of that fiscal year. Non-compliance with the above obligations will incur a fine of 10% of the value of the transactions that were not reported within said time limits or that were not reported at all. Violation of the arm’s length principle will incur further fines and penal sanctions.

The new rules do not apply to: (a) undertakings with annual turnover up to 1 million euro; (b) contracts between related undertakings of less than 200.000 euro annual value; (c) stock and shares transactions; (d) transfer of immovable or related rights and (e) undertakings that fall within the provisions of Law 89/1967.

The new rules apply for fiscal years ending after 18-12-2008.