Abolishment Of Stamp Duty On Loans Between Enterprises

• Published date: 25 May 2022
• Subject Matter: Tax, Sales Taxes: VAT, GST, Tax Authorities
• Law Firm: Eurofast
• Author: Ms Maria Sarantopoulou

In 2020, with the Decisions no. 2163/2020 and 2323/2020, the Hellenic Council of State (Greece's Supreme Administrative Court) held that the granting of interest-bearing loans falls within the scope of VAT and therefore said loans are not subject to stamp duty.

Factual background: A Greek company was granted consecutive interest-bearing loans by foreign affiliated undertakings. The loans were granted abroad, but part of the payments took place in Greece in the form of offsetting, manifested in the company's accounts. The tax administration authorities-imposed stamp duty on these payments, having been taken place in Greece. The company appealed the imposition decision before the administrative court. The appeal, having been dismissed at first and second instance, was upheld by the Supreme Administrative Court's final decision.

According to the Court, the provision of services in return for consideration, which takes place within the territory of the country, is subject to VAT. The provision of interest-bearing loan is considered as provision of services, with the interest being the lender's remuneration. Ultimately, the granting of loans is exempt from VAT according to Article 22 of the VAT Code, however, as it falls in principle within the scope of VAT as provision of services, is not subject to stamp duty.

The provision of interest-bearing loans is not subject to stamp duty since the VAT Code was adopted in 1987, establishing that the provision of services is subject to VAT. Nevertheless, the tax administration authorities have been interpreting the law contra legem by imposing stamp duty on all interest-bearing loans granted by non-banking entities.

Despite the courts' rulings being in principle binding solely between the parties, theDecisions no. 2163/2020 and 2323/2020 of the Supreme Administrative Court showcase the...