ATHEXCSD provides tax support services in the following areas:
- Taxation of sales value oftransactions settled within ATHEXCSD
- Taxation of sales value oftransactions settled outside ATHEXCSD
- Taxation of OTC borrowing
- Taxation of cash distributions
- Taxation of capital gains resulting from the transfer of transferable securities
1. Taxation of sales value of transactions settled within ATHEXCSD
The sale of shares settled within ATHEXCSD is subject to 0.2% sales tax in accordance with Article 9 (2) (c) of Law 2579/1998 and Ministerial Decision A.1236/2021. ATHEXCSD calculates and notifies daily the sales tax to the Participants, who then pay it to ATHEXCSD for attributing to the Greek State.
The tax on OTC transfers is calculated as follows:
- For settled OTC transactions upon a Participant instruction, the sales tax is calculated on the transfer value of the shares transfer, as registered by the Participant acting on behalf of the Seller who has the relevant obligation. In cases where the transaction does not carry a transfer price, the value is calculated on the basis of the closing price on the transaction date.
- For settled OTC transactions upon a beneficiary instruction, the sales tax is calculated on the transfer value. The transfer value is regarded as the highest between the value stated in the relevant transfer agreement submitted to ATHEXCSD and the value resulting from the multiplication of the share Closing Price, on the same day as this of the relevant transfer request filing (transaction date), with the number of shares transferred.
- For transfers by reason of Donation, Parental Benefit or Succession, the tax obligation is exhausted by a declaration of the person having the obligation to the tax authorities, to the relevant Tax Office and receipt of the Article 105 Certificate.
- For securities transfers to employees/partners/shareholders of a company in the context of free distribution of shares (free share award), if certain objectives have been achieved or a specific event has occurred, in accordance with the Independent Authority of Public Revenue (IAPR) Circular E.2208/2020.
The sales tax shall not be levied where an exemption is provided for under special provisions.
2. Taxation of sales value of transactions settled outside ATHEXCSD
The 0.2% sales tax on transactions concerning shares held by a registered intermediary in an omnibus account and settled outside ATHEXCSD (internalized settlements) is calculated on a daily basis by the registered intermediary or another intermediary of the intermediary chain, for the account of the sellers, according to Article 9 (2) (d) of Law 2579/1998 and Ministerial Decision A.1237/2021. Each intermediary of the chain submits a tax declaration and at the same time pays the tax to the next intermediary or the registered intermediary and finally to the Participant and ATHEXCSD, which attributes it to the Greek State.
The sales tax is also levied on the sale of shares listed on a regulated market or foreign multilateral trading facility, regardless of whether the transactions are settled inside or outside the foreign settlement venues, as long as sellers are natural persons/businesses having their domicile/permanent establishment in Greece [Article 9 (2)(e) of Law 2579/1998]. The tax due on the sale of shares listed on a regulated market or a foreign multilateral trading facility is calculated based on the value of the share sale and is attributed to the Greek State by the seller.
3. Taxation of OTC borrowing
OTC borrowing is taxed in accordance with Article 4 (4) of Law 4038/2012 at a rate of 0.2% and is borne by the lender, irrespective of whether it is a natural or legal person, domestic or foreign. ATHEXCSD collects the tax from the Participants and attributes it to the Greek State.
4. Taxation of cash distributions
ATHEXCSD calculates on behalf of the Issuer the tax in each monetary distribution, taking into account the specific tax treatment categories of each Securities Account, as recorded by the Participants. ATHEXCSD then informs the Issuer of the tax corresponding to in cash distributions (e.g. dividends) and/or distributions-in-kind (e.g. reinvestments), who in turn attributes it to the Greek State.
For foreign securities, ATHEXCSD withholds the Greek tax from the net amount received from the Provider, after the latter has withheld the foreign tax.
Based on the current tax regime, a tax rate of 5% is applied in case of dividends and interim dividends.
Pursuant to the Circular 1042/2015 of Independent Authority for Public Revenue ‘IAPR', in case the liable persons request certificates for tax purposes, ATHEXCSD shall be responsible for their issue and provision to the beneficiaries through the Participants.
A 15% tax rate applies to coupon distributions. The Participants mediating shall be responsible for the tax withholding and attributing to the Greek State, acting as "paying agents". Tax withholding shall be carried out on the gross interest amount.
Investors who receive more favorable tax treatment must - at the beginning of each year - inform and provide the necessary supporting documents to the Participant of their Securities Account for the latter to enter the appropriate indication in the DSS.
5. Taxation of capital gains resulting from the transfer of transferable securities
Published on July 23rd, 2013 in the Government Gazette, Law 4172/2013 (A '167) resulted in the Greek Income Tax Code complete amendment.
The new provisions concern the income tax of natural-, legal persons and legal entities for income earned and expenses incurred in the tax years beginning from January 1st, 2014. Moreover, it also specifies the new scope for the application of capital gains tax on the transfer of transferable securities, as well as its entry into force on January 1st, 2014. The existing share sales tax (0.2% rate on the value of transactions) will continue to apply from 01/01/2014 in parallel with the capital gains tax.
In particular, the following shall be specified for the capital gains tax on transferable securities:
- Capital gains resulting from transferable securities transfers shall be taxed at a rate of 15% only for natural persons, provided that such transfers do not constitute business activity.
- The new provisions apply to capital gains from securities transfers made from January 1st, 2014 onwards. The previous provision of Law 4110/2013 on taxation at 20% rate of the capital gains from the Athens Stock Exchange listed shares transfer, for shares acquired from July 1st, 2013 onwards, is repealed.
- The exemption of capital gains arising from the exchange of Greek Government bonds or corporate bonds guaranteed by the Greek State with other transferable securities under the PSI, shall remain in force.
- Capital gains from the transfer of securities include listed or non-listed companies shares, Greek Government and Corporate Bonds, Greek State Treasury Bills and Derivative Financial Instruments, which are indicatively identified.
- Goodwill or capital gains refers to the difference between the price paid for the redemption and the transfer price received, including any costs directly related to the securities purchase and sale and are not added or deducted accordingly.
* For listed securities, the acquisition or transfer price derives from the purchase/sale documents issued by the intermediary brokerage firm or custodian or other document disclosed to ATHEX.
* For non-listed securities, the transfer price is the highest between the contract transfer price and the equity (at the time of the transfer) value of the company issuing the transferred securities. The purchase price is the lowest between the contract transfer price and the equity (at the time of the transfer) value of the company issuing the transferred securities.
* If the acquisition price cannot be determined, it is considered as zero.
- A loss arising from the transfer of transferable securities may be transferred indefinitely (for natural persons only) and be offset only against future profits arising from the transfer of transferable securities, respectively.
- The above income categories are included in the income from business activities of legal persons and legal entities and are taxed in accordance with the relevant provisions.
- In any case, the provisions of the various Double Taxation Treaties ("DTT") shall prevail over the provisions of domestic law, which shall apply in the absence of a relevant DTT.