Inadequate Transfer Pricing Approach Costs Greek Companies €6.1 MM in Taxes and Penalties.


Transfer Pricing documentation for all types of intra-group transactions has been applicable to Greek entities for over a decade. However, a lot has changed the past few years, in fact, even the relevant law itself, during the pre-BEPS period and the post-BEPS period. At the same time, the tax authorities’ skills on the issue at hand have improved, even special departments have been established with one single goal: to finally pay attention! 

Below we present some interesting facts and useful conclusions based on the published administrative decisions of Dispute Resolution Directorate on Transfer Pricing issues within the last three years (2018-2020). 

A number of Greek entities, mostly as parts of significant MNEs, used their international identity and followed the wave from the very beginning. The understanding of the significance of the Transfer Pricing (TP) legislative framework, derived from the Group’s experience, worked as guidance for them. Their TP policies are now firm enough and they have learned to meet new challenges. 

On the other hand, the inability of tax authorities to effectively audit companies with a wider reach had created a sense of impunity for many taxpayers. 

This belief resulted in companies paying insufficient attention to adequately assess the importance of preparing and presenting a Transfer Pricing policy following the arm’s length principle. Consequently, their Transfer Pricing approach of intra-group transactions was misleading and incomplete. 

The last three years’ worth of issued administrative decisions are indicative of the situation and the future of the tax landscape in Greece.  

Among a series of 22 decisions of the Dispute Resolution Directorate as those published by the Independent Authority for Public Revenue (I.A.P.R) in Greece, the overall adjustments exceeded 16 million with approximately 2.7 million Euros of additional taxes due by taxpayers. Additionally, the fines related to inaccuracies and non-submission of Summary Informational Tables (SITs)  and Transfer Pricing (TP) studies have reached a staggering amount of 3.4 million Euros. 

It is worth noting that the above amounts awarded relate to approximately 70% of tax adjustments and fines that were validated during the initial tax audits.

Attention should also be paid to the fact that many cases would have concluded differently if the Group’s intragroup transaction policy had been carefully reviewed and presented in more detail.

Of course, the above analysis is only the top of the iceberg considering the number of pending cases and the ones that never followed a dispute resolution mechanism.  

The amounts of taxes and penalties demonstrate the urgent and crucial need to create an intra-group pricing policy plan in collaboration with highly skilled experts. This method is not only more thorough but also more efficient for companies in the long run, since the costs of consulting services are insignificant compared to the potential discrepancy cost as well as the considerable MNE’s reputational risks.

The continuous strengthening of the tax authorities with skilled human resources, the progress in the field of automated control procedures with the use of advanced technological equipment and software, as well as the pressure exerted on the Greek Governments to increase revenues in times of financial difficulty, has made cross-border transactions a priority through tax audit procedures.

Eurofast, enrolls high skilled professionals in the field and stands up to upcoming challenges in the tax landscapes. Our consultants are at your disposal to assist the organization of your Group’s policy along with your business vision in the most efficient way, always following the requirements of good administration and transparency. 

Eurofast is a regional business advisory organisation employing local advisors in over 23 cities in South East Europe & Middle East . The Organisation is uniquely positioned as one stop shop for investors and companies looking for professional services in South East Europe & the Middle East 

Anastasia Sagianni
Director, Transfer Pricing 
Eurofast Athens
Maria Anastasiou
Transfer Pricing Advisor
Eurofast Athens