The legislative framework for the preparation and audit of Transfer Pricing documentation in Greece is based on the requirements of Income Tax Code and Tax procedures Code (see the Art. 50 & 51 of Law 4172/2002 and Art. 21 and 22 of Law 4174/1993). The Independent Authority for Public Revenue (IAPR) recently presented amended Forms of Income Tax Return “E3” and “N”, which will share data with the Transfer Pricing Folder and the relevant Summary Information Table. The following points summarize these amendments:
- No modifications exist, regarding the procedure and the content of the Summary Information Table for intragroup transactions which is prepared and submitted to the Portal of Independent Authority for Public Revenue (IAPR) of the Summary Information Table for Intragroup Transactions (SIT), compared with the previous year. In line with that, no modifications exist for the preparation, the structure/content and auditing process of the Transfer Pricing Folder, which are mostly based on the OECD guidelines. Last but not least, all kind of penalties and sanctions for the non-compliance with the provisions of the Greek Transfer Pricing Legislation is provided in the circular of IAPR with number “POL.1252/20.11.2015”. We note that the submission of SIP is due before the submission of the respective CIT return. Moreover the submission of SIT confirms the existence of the Transfer Pricing file.
- However, the IARP introduced new amended templates for Income Tax Return of FY 2017 for Enterprises in which additional data for the presentation of Intragroup Transactions are required; the additional data for Intragroup Transactions are requested to be recorded in the new “E3” and “N” forms, valid for fiscal year 2017.
More specifically in the new E3 form:
(a) Data of the related entities must be filed (section 037 of Table B). These data will be pre-filled by the IAPR based on the submitted SIT, while the enterprise can add and/or modify them,
(b) Not listed SA Companies, need to present their shareholders (section 038 of Table B) and
(c) The expenses from related entities must be specifically indicated (sub-table Z2, analysis of code no 185).
As regards the Form N (in code no 446), the enterprises need to specify the difference which must increase the taxable results, in cases of non-compliance with the arm’s length principle on intragroup transactions, based on the provisions of article 50 of L4172/2013.
These amendments are highlighting the significance of arm’s length validation for intragroup transactions. It is evident that the Companies is not possible not to present the full set of interconnected entities and to introduce the full range of the intragroup transactions since the data that were recorded in the new Forms “E3” and “N” will allow to the IAPR to crosscheck the available tax information. It is understood that for avoiding penalties due to likely non-compliance with Transfer Pricing provisions, the Companies need to state consistent accounting data in Summary Information Table and in Forms “E3” & “N”.