Thursday, April 9, 2015

Bulgaria complains to EC over 'unfair' Greek tax. Greece could be obliged to compensate Bulgaria if the regulation is found to be unfair.

Bulgaria has made a formal complaint to the European Commission alleging Greece has placed a discriminatory tax on Greek companies working in the Balkan republic.

The regulations in question were passed last month by Greece and envision the introduction of a 26 per cent tax on all transactions carried out by Greek companies with firms in countries with “preferential tax regimes”, a list that includes three EU member states – Bulgaria, Cyprus and Ireland – with a lower corporate tax rate than Greece.

Neither Cyprus nor Ireland has yet reacted to the new tax.

The complaint was received by the Commission on Wednesday.

The Greek law is intended to target transactions made in foreign jurisdictions with lower tax rates solely to avoid Greek taxes.

The regulation also targets Bulgarian companies which export to Greece.

Under the new rules, the tax would be charged up-front and companies will have three months to obtain a rebate by proving that the transaction was a routine commercial operation, rather than a deal meant to avoid paying taxes in Greece.

Bulgaria said in the complaint that the new tax would cost as much as €800 million ($862.4 million) per year.

The European Commission now has three months to consider the Bulgarian complaint against Greece, and Greece could be obliged to compensate Bulgaria if the regulation is found to be unfair.


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